Amendment No. 4

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WPPzh2P0KBWu/YHwrCfdGT9KFgKGc3JekXyc4k5rZRXdGi75fdO+Y1h9ItZ3VgpT JiYG8VqUh6n7Ix/mlY8WTg== 0001193125-05-211076.txt : 20051028 0001193125-05-211076.hdr.sgml : 20051028 20051028155754 ACCESSION NUMBER: 0001193125-05-211076 CONFORMED SUBMISSION TYPE: POS AMI PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20051028 DATE AS OF CHANGE: 20051028 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JPMorgan Institutional Trust CENTRAL INDEX KEY: 0001303608 IRS NUMBER: 201491791 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: POS AMI SEC ACT: 1940 Act SEC FILE NUMBER: 811-21638 FILM NUMBER: 051163272 BUSINESS ADDRESS: STREET 1: 522 5TH AVENUE CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: (212) 837-2524 MAIL ADDRESS: STREET 1: 522 5TH AVENUE CITY: NEW YORK STATE: NY ZIP: 10036 POS AMI 1 dposami.htm AMENDMENT NO. 4 Amendment No. 4

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 28, 2005

File No. 811-21638

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT

UNDER


		*THE INVESTMENT COMPANY ACT OF 1940*		x

AMENDMENT No. 4

JPMORGAN INSTITUTIONAL TRUST

(Exact Name of Registrant as Specified in Charter)

522 Fifth Avenue

New York, New York 10036

(Address of Principal Executive Offices)

Registrant’s Telephone Number, including Area Code (212) 837-2524

Scott E. Richter, Esq.

JPMorgan Chase & Co.

1111 Polaris Parkway, Mail Code OH1-0152

Columbus, Ohio 43240

(Name and Address of Agent for Service)

Copies to:

Jessica K. Ditullio, Esq.

JPMorgan Chase & Co.

1111 Polaris Parkway, Mail Code OH1-0152

Columbus, Ohio 43240

Frederick Wertheim, Esq.

Sullivan & Cromwell LLP

125 Broad Street

New York, New York 10004

EXPLANATORY NOTE

This Amendment is filed by JPMorgan Institutional Trust (the “Registrant”). This Registration Statement has been filed by the Registrant pursuant to Section 8(b) of the Investment Company Act of 1940, as amended. However, shares of beneficial interest in the Registrant are not being registered under the Securities Act of 1933, as amended (the “Securities Act”), because such shares are issued solely in private placement transactions that do not involve a “public offering” within the meaning of Section 4(2) of the Securities Act. The shares have not been registered under any state securities laws in reliance upon various exemptions provided by those laws. Investments in the shares of the Registrant may be made only by “accredited investors” within the meaning of Regulation D under the Securities Act. This Registration Statement does not constitute an offer to sell, or the solicitation of an offer to buy, any shares of the Registrant.


Prospective Investor		Copy #
		DO NOT COPY OR CIRCULATE

INSTITUTIONAL INVESTING

Confidential Offering Memorandum

JPMorgan Institutional Trust

October 28, 2005

JPMorgan Ultra Short-Term Bond Trust

JPMorgan Short-Term Bond Trust

JPMorgan Intermediate Bond Trust

JPMorgan Core Bond Trust

JPMorgan Equity Index Trust

For Institutional Clients

This cover is not part of the Confidential Offering Memorandum. Each Fund issues shares only in private placement transactions in accordance with Regulation D or other applicable exemptions under the Securities Act of 1933, as amended (“Securities Act”). The enclosed Confidential Offering Memorandum is not an offer to sell, or a solicitation of any offer to buy, any security to the public within the meaning of the Securities Act. In addition, there shall be no sale of the shares referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

This Confidential Offering Memorandum (“Memorandum”) describes five separate series (each a “Fund” and collectively the “Funds”) of the JPMorgan Institutional Trust. Shares of the Funds have not been registered under the Securities Act of 1933, as amended (“Securities Act”), or the securities laws of any state. Each Fund issues its shares only in private placement transactions in accordance with Regulation D or other applicable exemptions under the Securities Act. This Memorandum is not an offer to sell, or a solicitation of any offer to buy, any security to the public within the meaning of the Securities Act.

Shares of the Funds may be purchased only by certain clients of J.P. Morgan Investment Management Inc. (“JPMIM”) and its affiliates who maintain one or more separately managed private accounts, and who are “accredited investors,” as defined in Regulation D under the Securities Act. Eligible investors are institutional investors such as corporations, pension and profit sharing plans, financial institutions, endowments, and foundations. The Funds are not intended for individuals or accounts established for the benefit of individuals (other than certain pension and profit-sharing plans sponsored by employers or unions for the benefit of individual plan participants). Subscriptions may be accepted or rejected, in whole or in part, in the sole discretion of JPMIM. Shares of the Funds may also be purchased by certain investors outside of the United States consistent with applicable regulatory requirements.

Shares of the Funds are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under the Securities Act. Shares may be redeemed only in accordance with the procedures set forth in this Memorandum.

This Memorandum is intended for use only by the person to whom it has been issued. This Memorandum may not be reproduced, provided to others or used for any other purpose.

The U.S. Securities and Exchange Commission (“SEC”) has not approved or disapproved the shares of any of the Funds as an investment or determined whether this Memorandum is accurate or complete. Any representation to the contrary is a criminal offense.

The Funds provide access to the professional investment advisory services offered by JPMIM, which is an indirect wholly owned subsidiary of JPMorgan Chase & Co., a bank holding company. Investors may direct questions regarding the Funds to their client relationship or client service manager.

Although the Funds may be similar to one or more other funds or accounts advised by JPMIM or its affiliates, each Fund is a separate series with its own investment objective, policies and expenses. Other funds and accounts advised by JPMIM or its affiliates will have different investment results, and information about those funds and accounts should not be assumed to apply to the Funds.

This Memorandum explains what you should know about the Funds before you invest. Please read it carefully.

Table of Contents


Fund Summaries: Investments, Risk & Performance
JPMorgan Ultra Short-Term Bond Trust		1
JPMorgan Short-Term Bond Trust		5
JPMorgan Intermediate Bond Trust		9
JPMorgan Core Bond Trust		13
JPMorgan Equity Index Trust		17

More About the Funds
Principal Investment Strategies		20
Investment Risks		22
Portfolio Quality		23
Temporary Defensive Positions		24
Portfolio Turnover		25

Subscribing for and Purchasing and Redeeming Fund Shares
Purchasing Fund Shares		26
Redeeming Fund Shares		28

Shareholder Information
Voting Rights		30
Dividend Policies		30
Tax Treatment of Shareholders		30
Shareholder Statements and Reports		32
Availability of Proxy Voting Record		32
Portfolio Holdings Disclosure		32

Management of the Funds
The Adviser		33
Advisory Fees		33
The Fund Managers		34
JPMorgan Investment Advisors – Related Performance		36

Appendix A: Investment Practices		43

FUND SUMMARY: INVESTMENTS, RISK & PERFORMANCE

JPMORGAN^®

Ultra Short-Term Bond Trust

The Ultra Short-Term Bond Trust has not commenced operations and is not presently available for subscription.


What is the goal of the Fund?		The Fund seeks a high level of current income consistent with low volatility of principal by investing in a diversified portfolio of short-term investment grade securities.

What are the Fund’s main investment strategies?		The Fund mainly invests in all types of investment grade debt securities (or unrated debt securities which JPMIM determines to be of comparable quality), including mortgage-backed securities, asset-backed securities and money market instruments. As part of its main investment strategy, the Fund invests in fixed and floating rate debt securities and other securities representing an interest in or secured by residential mortgage loans. JPMIM selects securities for the Fund by analyzing both individual securities and different market sectors. JPMIM looks for market sectors and individual securities that it believes will perform well over time. JPMIM selects individual securities after performing a risk/reward analysis that includes an evaluation of interest rate risk, credit risk, and the complex legal and technical nature of the transaction. For more information about the Ultra Short-Term Bond Trust’s investment strategies, please read “More About the Funds” and “Principal Investment Strategies.”

What is a bond?		A “bond” is a debt security with a maturity of 90 days or more at the time of its issuance that is issued by the U.S. government or its agencies and instrumentalities, a U.S. corporation, a foreign corporation or a municipality, securities issued or guaranteed by a foreign government or its agencies and instrumentalities, securities issued or guaranteed by domestic and supranational banks, mortgage-related and mortgage-backed securities, asset-backed securities, convertible bonds, stripped government securities and zero coupon obligations.

What are the main risks of investing in the Fund?		The main risks of investing in the Fund and the circumstances likely to adversely affect your investment are described below. The share price of the Fund and its yield will change every day in response to interest rates and other market conditions. You may lose money if you invest in the Fund. For additional information on risk, please read “Investment Risks.”

MAIN RISKS		Interest Rate Risk. The Fund mainly invests in bonds and other debt securities. These securities will increase or decrease in value based on changes in interest rates. If rates increase, the value of the Fund’s investments generally declines. On the other hand, if rates fall, the value of the investments generally increases. Your investment will decline in value if the value of the Fund’s investments decreases. Securities with greater interest rate sensitivity and longer maturities tend to produce higher yields, but are subject to greater fluctuations in value. Usually, changes in the value of fixed income securities will not affect cash income generated, but may affect the value of your investment.

FUND SUMMARY

Ultra Short-Term Bond Trust

Credit Risk. There is a risk that issuers and counterparties will not make payments on securities and
repurchase agreements held by the Fund. Such defaults could result in losses to the Fund. In
addition, the credit quality of securities held by the Fund may be lowered if an issuer’s financial
condition changes. Lower credit quality may lead to greater volatility in the price of a security and
in shares of the Fund. Lower credit quality also may affect liquidity and make it difficult for the
Fund to sell the security.

U.S. Government Agency Securities. The Fund invests in securities issued or guaranteed by the U.S.
government or its agencies and instrumentalities (such as Ginnie Mae, Fannie Mae or Freddie Mac
securities). Securities issued or guaranteed by Ginnie Mae, Fannie Mae or Freddie Mac are not
issued directly by the U.S. government. Ginnie Mae is a wholly-owned U.S. corporation that is
authorized to guarantee, with the full faith and credit of the U.S. government, the timely payment of
principal and interest on its securities. By contract, securities issued or guaranteed by U.S.
government related organizations such as Fannie Mae and Freddie Mac are not backed by the full
faith and credit of the U.S. government. No assurance can be given that the U.S. government would
provide financial support to its agencies and instrumentalities if not required to do so by law.

Prepayment and Call Risk. As part of its main investment strategy, the Fund invests in mortgage-
backed and asset-backed securities. The issuers of these securities and other callable securities may
be able to repay principal in advance, especially when interest rates fall. Changes in prepayment
rates can affect the return on investment and yield of mortgage- and asset-backed securities. When
mortgages and other obligations are prepaid and when securities are called, the Fund may have to
reinvest in securities with a lower yield. The Fund also may fail to recover additional amounts (i.e.,
premiums) paid for securities with higher interest rates, resulting in an unexpected capital loss.

Derivative Risk. The Fund invests in securities that may be considered to be derivatives. The value
of derivative securities is dependent upon the performance of underlying assets or securities. If the
underlying assets do not perform as expected, the value of the derivative security and your
investment in the Fund may decline. Generally, derivatives are more volatile and are riskier in terms
of both liquidity and value than traditional investments.

Not FDIC Insured. An investment in the Fund is not a deposit of JPMorgan Chase & Co. or any of
its affiliates or any other bank and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.

FUND SUMMARY

Ultra Short-Term Bond Trust

The Fund’s Past Performance

The Fund has not commenced operations as of the date of this Memorandum and therefore, has no reportable performance history. Once the Fund has performed for at least one calendar year, a bar chart and a performance table will be included in the Memorandum to show the performance of the Fund.¹ An appropriate broad-based market index will also be included in the performance table. Although past performance of a Fund is no guarantee of how it will perform in the future, historical performance may give you some indication of the risks of investing in the Fund.

1	The Fund’s fiscal year end is 6/30.

FUND SUMMARY

Ultra Short-Term Bond Trust

Fees and Expenses

In addition to the fees and expenses of the Fund set out below, separate account clients of JPMIM or its affiliates may also incur investment advisory, servicing and other fees in connection with the maintenance of the client’s separately managed account.

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

ANNUAL FUND OPERATING EXPENSES

(expenses that are deducted from Fund assets)



Investment Advisory Fees	0.25	%
Administrative Fees	0.10	%
Other Expenses¹	0.28	%
Total Annual Fund Operating Expenses	0.63	%
Fee Waiver and/or Expense Reimbursement²	(0.53	)%
Net Expenses	0.10	%

¹	“Other Expenses” are based on estimated amounts for the current fiscal year.

In the interest of limiting expenses of the Fund, JPMIM and the Trust’s Administrator have entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”), pursuant to which JPMIM and the Trust’s Administrator have agreed to waive or limit their fees and to assume other expenses so that the total annualized Fund operating expenses (other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with generally accepted accounting principles, placement related expenses (if any), and other extraordinary expenses not incurred in the ordinary course of the Fund’s business) are limited to 0.10% of the average daily net assets for the period beginning September 30, 2004 through October 31, 2006.

Examples

The examples assume that you invest $10,000 in the Fund for the time periods indicated and reflect what you would pay if you either redeemed all of your shares or if you continued to hold them at the end of the periods shown. The examples also assume that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Information provided in the table for the one-year time period is based upon the Net Expenses shown in the fee and expense table. Subsequent periods are based on Total Annual Fund Operating Expenses without taking into consideration the contractual waivers in place for the Fund. Your actual costs may be higher or lower than those shown.


1 Year¹		3 Years
$ 10		$ 148

¹	Without contractual fee waivers, 1 Year expenses would be $64.

FUND SUMMARY: INVESTMENTS, RISK & PERFORMANCE

Short-Term Bond Trust

The Short-Term Bond Trust has not commenced operations and is not presently available for subscription.


What is the goal of the Fund?		The Fund seeks current income consistent with preservation of capital through investment in high- and medium-grade fixed income securities.

What are the Fund’s main investment strategies?		The Fund mainly invests in investment grade debt securities (or unrated debt securities which JPMIM determines to be of comparable quality) with short to intermediate remaining maturities. These include U.S. government obligations, and mortgage-backed and asset-backed securities. JPMIM selects securities for the Fund by analyzing both individual securities and different market sectors. JPMIM looks for market sectors and individual securities that it believes will perform well over time. JPMIM selects individual securities after performing a risk/reward analysis that includes an evaluation of interest rate risk, credit risk, and the complex legal and technical structure of the transaction. For more information about the Short-Term Bond Trust’s investment strategies, please read “More About the Funds” and “Principal Investment Strategies.”

What is a bond?		A “bond” is a debt security with a maturity of 90 days or more at the time of its issuance that is issued by the U.S. government or its agencies and instrumentalities, a U.S. corporation, a foreign corporation or a municipality, securities issued or guaranteed by a foreign government or its agencies and instrumentalities, securities issued or guaranteed by domestic and supranational banks, mortgage-related and mortgage-backed securities, asset-backed securities, stripped government securities and zero coupon obligations.

What are the main risks of investing in the Fund?		The main risks of investing in the Fund and the circumstances likely to adversely affect your investment are described below. The share price of the Fund and its yield will change every day in response to interest rates and other market conditions. You may lose money if you invest in the Fund. For additional information on risk, please read “Investment Risks.”

MAIN RISKS		Interest Rate Risk. The Fund mainly invests in bonds and other debt securities. These securities will increase or decrease in value based on changes in interest rates. If rates increase, the value of the Fund’s investments generally declines. On the other hand, if rates fall, the value of the investments generally increases. Your investment will decline in value if the value of the Fund’s investments decreases. Securities with greater interest rate sensitivity and longer maturities tend to produce higher yields, but are subject to greater fluctuations in value. Usually, changes in the value of fixed income securities will not affect cash income generated, but may affect the value of your investment.

FUND SUMMARY

Ultra Short-Term Bond Trust

Credit Risk. There is a risk that issuers and counterparties will not make payments on securities and repurchase agreements held by the Fund. Such defaults could result in losses to the Fund. In addition, the credit quality of securities held by the Fund may be lowered if an issuer’s financial condition changes. Lower credit quality may lead to greater volatility in the price of a security and in shares of the Fund. Lower credit quality also may affect liquidity and make it difficult for the Fund to sell the security.

U.S. Government Agency Securities. The Fund invests in securities issued or guaranteed by the U.S. government or its agencies and instrumentalities (such as Ginnie Mae, Fannie Mae or Freddie Mac securities). Securities issued or guaranteed by Ginnie Mae, Fannie Mae or Freddie Mac are not issued directly by the U.S. government. Ginnie Mae is a wholly-owned U.S. corporation that is authorized to guarantee, with the full faith and credit of the U.S. government, the timely payment of principal and interest on its securities. By contract, securities issued or guaranteed by U.S. government related organizations such as Fannie Mae and Freddie Mac are not backed by the full faith and credit of the U.S. government. No assurance can be given that the U.S. government would provide financial support to its agencies and instrumentalities if not required to do so by law.

Prepayment and Call Risk. As part of its main investment strategy, the Fund invests in mortgage-backed and asset-backed securities. The issuers of these securities and other callable securities may be able to repay principal in advance, especially when interest rates fall. Changes in prepayment rates can affect the return on investment and yield of mortgage- and asset-backed securities. When mortgages and other obligations are prepaid and when securities are called, the Fund may have to reinvest in securities with a lower yield. The Fund also may fail to recover additional amounts (i.e., premiums) paid for securities with higher interest rates, resulting in an unexpected capital loss.

Derivative Risk. The Fund may invest in securities that may be considered to be derivatives. The value of derivative securities is dependent upon the performance of underlying assets or securities. If the underlying assets do not perform as expected, the value of the derivative security and your investment in the Fund may decline. Generally, derivatives are more volatile and riskier in terms of both liquidity and value than traditional investments.

Not FDIC Insured. An investment in the Fund is not a deposit of JPMorgan Chase & Co. or any of its affiliates or any other bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

FUND SUMMARY

Short-Term Bond Trust

The Fund’s Past Performance

1	The Fund’s fiscal year end is 6/30.

FUND SUMMARY

Short-Term Bond Trust

Fees and Expenses

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

ANNUAL FUND OPERATING EXPENSES

(expenses that are deducted from Fund assets)


Investment Advisory Fees	0.25	%
Administrative Fees	0.10	%
Other Expenses¹	0.04	%
Total Annual Fund Operating Expenses	0.39	%
Fee Waiver and/or Expense Reimbursement²	(0.29	)%
Net Expenses	0.10	%

¹	“Other Expenses” are based on estimated amounts for the current fiscal year.

Examples


1 Year¹		3 Years
$10		$ 96

¹	Without contractual fee waivers, 1 Year expenses would be $40.

FUND SUMMARY: INVESTMENTS, RISK & PERFORMANCE

Intermediate Bond Trust


What is the goal of the Fund?		The Fund seeks current income consistent with the preservation of capital by investing in high- and medium-grade fixed income securities with intermediate maturities.

What are the Fund’s main investment strategies?		The Fund mainly invests in investment grade debt securities of all types (or unrated debt securities which JPMIM determines to be of comparable quality), including bonds, notes and U.S. government obligations with intermediate maturities. These include mortgage-backed and asset-backed securities. JPMIM selects securities for the Fund by analyzing both individual securities and different market sectors. JPMIM looks for market sectors and individual securities that it believes will perform well over time. JPMIM selects individual securities after performing a risk/reward analysis that includes an evaluation of interest rate risk, credit risk, and the complex legal and technical structure of the transaction. For more information about the Intermediate Bond Trust’s investment strategies, please read “More About the Funds” and “Principal Investment Strategies.”

What is a bond?		A “bond” is a debt security with a maturity of 90 days or more at the time of its issuance that is issued by the U.S. government or its agencies and instrumentalities, a U.S. corporation, a foreign corporation or a municipality, securities issued or guaranteed by a foreign government or its agencies and instrumentalities, securities issued or guaranteed by domestic and supranational banks, mortgage-related and mortgage-backed securities, asset-backed securities, convertible bonds, stripped government securities and zero coupon obligations.

What are the main risks of investing in the Fund?		The main risks of investing in the Fund and the circumstances likely to adversely affect your investment are described below. The share price of the Fund and its yield will change every day in response to interest rates and other market conditions. You may lose money if you invest in the Fund. For additional information on risk, please read “Investment Risks.”

MAIN RISKS		Interest Rate Risk. The Fund mainly invests in bonds and other debt securities. These securities will increase or decrease in value based on changes in interest rates. If rates increase, the value of the Fund’s investments generally declines. On the other hand, if rates fall, the value of the investments generally increases. Your investment will decline in value if the value of the Fund’s investments decreases. Securities with greater interest rate sensitivity and longer maturities tend to produce higher yields, but are subject to greater fluctuations in value. Usually, changes in the value of fixed income securities will not affect cash income generated, but may affect the value of your investment.

FUND SUMMARY

Intermediate Bond Trust

Credit Risk. There is a risk that issuers and counterparties will not make payments on securities
and repurchase agreements held by the Fund. Such defaults could result in losses to the Fund. In
addition, the credit quality of securities held by the Fund may be lowered if an issuer’s financial
condition changes. Lower credit quality may lead to greater volatility in the price of a security
and in shares of the Fund. Lower credit quality also may affect liquidity and make it difficult for
the Fund to sell the security.

U.S. Government Agency Securities. The Fund invests in securities issued or guaranteed by the
U.S. government or its agencies and instrumentalities (such as Ginnie Mae, Fannie Mae or
Freddie Mac securities). Securities issued or guaranteed by Ginnie Mae, Fannie Mae or Freddie
Mac are not issued directly by the U.S. government. Ginnie Mae is a wholly-owned U.S.
corporation that is authorized to guarantee, with the full faith and credit of the U.S. government,
the timely payment of principal and interest on its securities. By contract, securities issued or
guaranteed by U.S. government related organizations such as Fannie Mae and Freddie Mac are
not backed by the full faith and credit of the U.S. government. No assurance can be given that
the U.S. government would provide financial support to its agencies and instrumentalities if not
required to do so by law.

Prepayment and Call Risk. As part of its main investment strategy, the Fund invests in
mortgage-backed and asset-backed securities. The issuers of these securities and other callable
securities may be able to repay principal in advance, especially when interest rates fall. Changes
in prepayment rates can affect the return on investment and yield of mortgage- and asset-backed
securities. When mortgages and other obligations are prepaid and when securities are called, the
Fund may have to reinvest in securities with a lower yield. The Fund also may fail to recover
additional amounts (i.e., premiums) paid for securities with higher interest rates, resulting in an
unexpected capital loss.

Derivative Risk. The Fund may invest in securities that may be considered to be derivatives. The
value of derivative securities is dependent upon the performance of underlying assets or
securities. If the underlying assets do not perform as expected, the value of the derivative
security and your investment in the Fund may decline. Generally, derivatives are more volatile
and riskier in terms of both liquidity and value than traditional investments.

Not FDIC Insured. An investment in the Fund is not a deposit of JPMorgan Chase & Co. or any
of its affiliates or any other bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.

FUND SUMMARY

Intermediate Bond Trust

The Fund’s Past Performance

The Fund commenced operations on February 7, 2005 and does not have a calendar year of performance history. Once the Fund has performed for at least one calendar year, a bar chart and a performance table will be included in the Memorandum to show the performance of the Fund.¹ An appropriate broad-based market index will also be included in the performance table. Although past performance of a Fund is no guarantee of how it will perform in the future, historical performance may give you some indication of the risks of investing in the Fund.

1	The Fund’s fiscal year end is 6/30.

FUND SUMMARY

Intermediate Bond Trust

Fees and Expenses

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

ANNUAL FUND OPERATING EXPENSES

(expenses that are deducted from Fund assets)


Investment Advisory Fees		0.30%
Administrative Fees		0.10%
Other Expenses		0.05%
Total Annual Fund Operating Expenses		0.45%
Fee Waiver and/or Expense Reimbursement¹		(0.30)%
Net Expenses		0.15%

In the interest of limiting expenses of the Fund, JPMIM and the Trust’s Administrator have entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”), pursuant to which JPMIM and the Trust’s Administrator have agreed to waive or limit their fees and to assume other expenses so that the total annualized Fund operating expenses (other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with generally accepted accounting principles, placement related expenses (if any), and other extraordinary expenses not incurred in the ordinary course of the Fund’s business) are limited to 0.15% of the average daily net assets for the period beginning September 30, 2004 through October 31, 2006.

Examples


1 Year¹	3 Years
$ 15	$	114

¹	Without contractual fee waivers, 1 Year expenses would be $46.

FUND SUMMARY: INVESTMENTS, RISK & PERFORMANCE

Core Bond Trust


What is the goal of the Fund?		The Fund seeks to maximize total return by investing primarily in a diversified portfolio of intermediate- and long-term debt securities.

What are the Fund’s main investment strategies?		The Fund invests mainly in investment grade bonds and debt securities (or unrated bonds and debt securities which JPMIM determines to be of comparable quality). These include U.S. government obligations and mortgage-backed and asset-backed securities. JPMIM analyzes four major factors in managing and constructing the Fund: duration, market sector, maturity concentrations and individual securities. JPMIM looks for market sectors and individual securities that it believes will perform well over time. JPMIM is value oriented and selects individual securities after performing a risk/reward analysis that includes an evaluation of interest rate risk, credit risk, and the complex legal and technical structure of the transaction. For more information about the Core Bond Trust’s investment strategies, please read “More About the Funds” and “Principal Investment Strategies.”

What is a bond?		A “bond” is a debt security with a maturity of 90 days or more at the time of its issuance that is issued by the U.S. government or its agencies and instrumentalities, a U.S. corporation, a foreign corporation or a municipality, securities issued or guaranteed by a foreign government or its agencies and instrumentalities, securities issued or guaranteed by domestic and supranational banks, mortgage-related and mortgage-backed securities, asset-backed securities, convertible bonds, stripped government securities and zero coupon obligations.

What are the main risks of investing in the Fund?		The main risks of investing in the Fund and the circumstances likely to adversely affect your investment are described below. The share price of the Fund and its yield will change every day in response to interest rates and other market conditions. You may lose money if you invest in the Fund. For additional information on risk, please read “Investment Risks.”

MAIN RISKS		Interest Rate Risk. The Fund mainly invests in bonds and other debt securities. These securities will increase or decrease in value based on changes in interest rates. If rates increase, the value of the Fund’s investments generally declines. On the other hand, if rates fall, the value of the investments generally increases. Your investment will decline in value if the value of the Fund’s investments decreases. Securities with greater interest rate sensitivity and longer maturities tend to produce higher yields, but are subject to greater fluctuations in value. Usually, changes in the value of fixed income securities will not affect cash income generated, but may affect the value of your investment.

FUND SUMMARY

Core Bond Trust

Not FDIC Insured. An investment in the Fund is not a deposit of JPMorgan Chase & Co. or any
of its affiliates or any other bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.

FUND SUMMARY

Core Bond Trust

The Fund’s Past Performance

1	The Fund’s fiscal year end is 6/30.

FUND SUMMARY

Core Bond Trust

Fees and Expenses

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

ANNUAL FUND OPERATING EXPENSES

(expenses that are deducted from Fund assets)


Investment Advisory Fees		0.30%
Administrative Fees		0.10%
Other Expenses		0.03%
Total Annual Fund Operating Expenses		0.43%
Fee Waiver and/or Expense Reimbursement¹		(0.28)%
Net Expenses		0.15%

In the interest of limiting expenses of the Fund, JPMIM and the Trust’s Administrator have entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”), pursuant to which JPMIM and the Trust’s Administrator have agreed to waive or limit their fees and to assume other expenses so that the total annualized Fund operating expenses (other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with generally accepted accounting principles, placement related expenses (if any), and other extraordinary expenses not incurred in the ordinary course of the Fund’s business) are limited to 0.15% of the average daily net assets for the period beginning September 30, 2004 through October 31, 2006.

Examples


1 Year¹	3 Years
$ 15	$	110

¹	Without contractual fee waivers, 1 Year expenses would be $44.

FUND SUMMARY: INVESTMENTS, RISK & PERFORMANCE

Equity Index Trust


What is the goal of the Fund?		The Fund seeks investment results that correspond to the aggregate price and dividend performance of securities in the Standard & Poor’s 500 Composite Stock Price Index (“S&P 500 Index”).¹

What are the Fund’s main investment strategies?		The Fund invests mainly in stocks included in the S&P 500 Index. The Fund also may invest in stock index futures and other equity derivatives. JPMIM attempts to track the performance of the S&P 500 Index to achieve a correlation of 0.95 between the performance of the Fund and that of the S&P 500 Index without taking into account the Fund’s expenses. For more information about the Equity Index Trust’s investment strategies, please read “More About the Funds” and “Principal Investment Strategies.”

What are the main risks of investing in the Fund?		The main risks of investing in the Fund and the circumstances likely to adversely affect your investment are described below. The share price of the Fund will change every day in response to market conditions. You may lose money if you invest in the Fund. For additional information on risk, please read “Investment Risks.”

MAIN RISKS		Index Investing. The Fund attempts to track the performance of the S&P 500 Index. Therefore, securities may be purchased, retained and sold by the Fund at times when an actively managed fund would not do so. If the value of securities that are heavily weighted in the index changes, you can expect a greater risk of loss than would be the case if the Fund were not fully invested in such securities. Market Risk. The Fund invests in equity securities (such as stocks) that are more volatile and carry more risks than some other forms of investment. The price of equity securities may rise or fall because of economic or political changes or changes in a company’s financial condition. Equity securities also are subject to “stock market risk” meaning that stock prices in general (or in particular, the types of securities in which the Fund invests) may decline over short or extended periods of time. When the value of the Fund’s securities goes down, your investment in the Fund decreases in value. Not FDIC Insured. An investment in the Fund is not a deposit of JPMorgan Chase & Co. or any of its affiliates or any other bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

¹	“S&P 500” is a registered service mark of Standard & Poor’s Corporation, which does not sponsor and is in no way affiliated with the Fund.

FUND SUMMARY

Equity Index Trust

The Fund’s Past Performance

1	The Fund’s fiscal year end is 6/30.

FUND SUMMARY

Equity Index Trust

Fees and Expenses

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

ANNUAL FUND OPERATING EXPENSES

(expenses that are deducted from Fund assets)


Investment Advisory Fees		0.25%
Administrative Fees		0.10%
Other Expenses		0.06%
Total Annual Fund Operating Expenses		0.41%
Fee Waiver and/or Expense Reimbursement¹		(0.31)%
Net Expenses		0.10%

Examples


1 Year¹	3 Years
$ 10	$	100

¹	Without contractual fee waivers, 1 Year expenses would be $42.

More About the Funds

Each of the five Funds described in this Confidential Offering Memorandum (“Memorandum”) is a series of JPMorgan Institutional Trust and is managed by JPMIM. For more information about the Funds and JPMIM, please read “Management of the Funds” and the Confidential Offering Memorandum Supplement (“Supplement”).

PRINCIPAL INVESTMENT STRATEGIES

This Memorandum describes five mutual funds with a variety of investment objectives, including total return and current income. JPMIM selects securities for the Funds (other than the Equity Index Trust) by analyzing both individual securities and different industry sectors. JPMIM looks for sectors and securities that it believes will perform consistently well over time as measured by total return. The Funds attempt to enhance total return by selecting market sectors that offer risk/reward advantages based on structural risks and credit trends. Individual securities that are purchased by the Funds (other than the Equity Index Trust) are subject to a disciplined risk/reward analysis both at the time of purchase and on an ongoing basis. This analysis includes an evaluation of interest rate risk, credit risk and risks associated with the complex legal and technical structure of the investment (e.g., asset-backed securities and mortgage-backed securities). In addition, the principal investment strategies that are used to meet each Fund’s investment objective are described in “Fund Summaries: Investments, Risk & Performance” in the front of this Memorandum. They are also described below.

FUNDAMENTAL POLICIES

A Fund’s investment strategy may involve “fundamental policies.” A policy is fundamental if it cannot be changed without the consent of a majority of the outstanding shares of the Fund. All fundamental policies are specifically identified.

There can be no assurance that the Funds will achieve their investment objectives. Please note that the Funds may also use strategies that are not described below, but which are described in the Supplement.

JPMORGAN ULTRA SHORT-TERM BOND TRUST. The Fund invests in all types of debt securities including money market instruments, mortgage-backed securities and asset-backed securities. The Fund will maintain a maximum interest rate sensitivity approximately equal to that of a two-year U.S. Treasury security, although the Fund’s actual interest rate sensitivity is expected to be approximately equal to that of a one-year U.S. Treasury security.

•

Under normal circumstances, the Fund will invest at least 80% of its assets in bonds. If the Fund decides to change this strategy, shareholders will be given 60 days advance notice.

•

The Fund invests in fixed and floating rate debt securities representing an interest in or secured by residential mortgage loans. These securities often are issued or guaranteed by the U.S. government, its agencies or instrumentalities. However, the Fund also may purchase mortgage-backed securities and asset-backed securities that are issued by non-governmental entities. Such securities may or may not have private insurer guarantees of timely payments.

•

The Fund may invest in bonds and other debt securities that are rated in the lowest investment grade category.

JPMORGAN SHORT-TERM BOND TRUST. The Fund invests in all types of debt securities with short to intermediate maturities. Such securities include government securities such as U.S. Treasury obligations as well as Fannie Mae, Ginnie Mae, Freddie Mac and other government agency mortgage-backed securities.

•

Under normal circumstances, the Fund invests at least 80% of its assets in bonds. If the Fund decides to change this strategy, shareholders will be given 60 days advance notice.

•

Up to 20% of the Fund’s assets may be invested in preferred stock.

•

The Fund also may purchase taxable or tax-exempt municipal securities.

•

The Fund may invest in bonds and other debt securities that are rated in the lowest investment grade category.

•

The Fund’s effective average weighted maturity ordinarily will be three years or less taking into account expected amortization and prepayment of principal on certain investments.

JPMORGAN INTERMEDIATE BOND TRUST. The Fund invests in debt securities of all types including bonds, notes and U.S government obligations, rated as investment grade at the time of investment (or, if unrated, determined by JPMIM, to be of comparable quality). U.S. government obligations include U.S. Treasury obligations as well as Fannie Mae, Ginnie Mae, Freddie Mac and other government agency mortgage-backed securities.

•

As a matter of fundamental policy, the Fund will invest at least 80% of its net assets in bonds and at least 50% of total assets will consist of obligations issued by the U.S. government or its agencies and instrumentalities, some of which may be subject to repurchase agreements. For purposes of this policy, the Fund’s net assets include borrowings by the Fund for investment purposes.

•

Up to 20% of the Fund’s assets may be invested in preferred stock.

•

The Fund may invest in bonds and other debt securities that are rated in the lowest investment grade category.

•

The Fund’s average weighted maturity will ordinarily range between three and ten years, taking into account expected prepayment of principal on certain investments. The Fund may shorten that average weighted maturity to as little as one year for temporary defensive purposes.

WHAT IS AVERAGE WEIGHTED MATURITY?

Average weighted maturity is the average of all the current maturities (that is, the term of the securities) of the individual bonds in a Fund calculated so as to count most heavily those securities with the highest dollar value. Average weighted maturity is important to investors as an indication of a Fund’s sensitivity to changes in interest rates. Usually, the longer the average weighted maturity, the more fluctuation in share price you can expect. The terms “Intermediate” and “Short-Term” in a Fund’s name refer to the average maturity the Fund maintains. Mortgage-related securities are subject to prepayment of principal, which can shorten the average weighted maturity of the Fund’s portfolio. Therefore, in the case of a Fund holding mortgage-backed securities, asset-backed securities and similar types of securities, the average weighted maturity of the Fund is equivalent to its weighted average life. Weighted average life is the average weighted maturity of the cash flows in the securities held by the Fund given certain prepayment assumptions.

JPMORGAN CORE BOND TRUST. The Fund invests in all types of debt securities rated as investment grade (or unrated debt securities which JPMIM determines to be of comparable quality), as well as preferred stock and loan participations. Such securities include government securities such as U.S. Treasury obligations as well as Fannie Mae, Ginnie Mae, Freddie Mac and other government agency mortgage-backed securities.

•

As a matter of fundamental policy, the Fund will invest at least 80% of its net assets in bonds. For purposes of this policy, the Fund’s net assets include borrowings by the Fund for investment purposes. Generally, such bonds will have intermediate to long maturities.

•

The Fund also may purchase taxable or tax-exempt municipal securities.

•

The Fund may invest in bonds and other debt securities that are rated in the lowest investment grade category.

•

The Fund’s average weighted maturity will ordinarily range between four and 12 years, although the Fund may shorten its weighted average maturity if deemed appropriate for temporary defensive purposes.

JPMORGAN EQUITY INDEX TRUST. The Fund invests in stocks included in the S&P 500 Index. (The Fund also invests in stock index futures and other equity derivatives.) The Fund may hold up to 10% of its total assets in cash or cash equivalents. (Assets held in margin deposits and segregated accounts for futures contracts are not considered cash or cash equivalents for purposes of the 10% limitation.)

•

The percentage of a stock that the Fund holds will be approximately the same percentage that the stock represents in the S&P 500 Index.

•

JPMIM generally picks stocks in the order of their weightings in the S&P 500 Index, starting with the heaviest weighted stock.

•

The Fund attempts to achieve a correlation between the performance of the Fund and that of the S&P 500 Index of at least 0.95, without taking into account Fund expenses. Perfect correlation would be 1.00.

INVESTMENT RISKS

The main risks associated with investing in the Funds are described below and in “Fund Summaries: Investments, Risk & Performance” at the front of this Memorandum.

FIXED INCOME SECURITIES. Investments in fixed income securities (for example, bonds) will increase or decrease in value based on changes in interest rates. If rates increase, the value of a Fund’s investments generally declines. On the other hand, if rates fall, the value of the investments generally increases. The value of your investment in a Fund will increase and decrease as the value of the Fund’s investments increase and decrease. While securities with longer duration and maturities tend to produce higher yields, they also are subject to greater fluctuations in value when interest rates change. Usually, changes in the value of fixed income securities will not affect cash income generated, but may affect the value of your investment. Fixed income securities also are subject to the risk that the issuer of the security will be unable to meet its repayment obligations.

U.S. GOVERNMENT SECURITIES. U.S. government securities may be guaranteed by the U.S. Treasury, by the right to borrow from the U.S. Treasury, or only by the agency or instrumentality issuing the security. Certain agencies and instrumentalities are supported only by the right of the issuer to borrow from the U.S. Treasury, while others are supported by their own credit. No assurance can be given that the U.S. government would provide financial support to its agencies or instrumentalities unless required to do so by law.

Mortgage-backed securities may be issued by various U.S. governmental agencies such as Ginnie Mae, U.S. government-related organizations such as Fannie Mae and Freddie Mac, and non-governmental issuers. Ginnie Mae is a

wholly owned U.S. corporation that is authorized to guarantee, with the full faith and credit of the U.S. government, the timely payment of principal and interest on its securities. By contrast, U.S. government-related organizations such as Fannie Mae and Freddie Mac may guarantee the timely payment of principal and interest on their securities, but such guarantees are not backed by the full faith and credit of the U.S. government.

DERIVATIVES. The Funds may invest in securities that may be considered to be derivatives. These securities may be more volatile than other investments. Derivatives present, to varying degrees, market, credit, leverage, liquidity and management investment risks. A Fund’s use of derivatives may cause the Fund to recognize higher amounts of short-term capital gains (generally taxed at ordinary income tax rates) than if the Fund did not use such instruments.

WHAT IS A DERIVATIVE?

Derivatives are securities or contracts (like futures and options) that derive their value from the performance of underlying assets or securities.

LOWER-RATED INVESTMENT GRADE SECURITIES. The Ultra Short-Term Bond Trust, the Short-Term Bond Trust, the Intermediate Bond Trust and the Core Bond Trust (collectively, the Bond Funds) may purchase debt securities rated in the lowest investment grade category. Securities in this rating category are considered to have speculative characteristics. Changes in economic conditions or other circumstances may have a greater effect on the ability of issuers of these securities to make principal and interest payments than they do on issuers of higher grade securities.

SMALL-CAPITALIZATION COMPANIES. The Bond Funds may invest in securities of small-capitalization companies. Investments in smaller, younger companies may be riskier and more volatile than investments in larger, more established companies. Securities of smaller companies tend to be less liquid than securities of larger companies. In addition, small companies may be more vulnerable to economic, market and industry changes. Because economic events have a greater impact on smaller companies, there may be a greater and more frequent fluctuation in the value of their securities. This may cause unexpected decreases in the value of your investment in a Fund.

FOREIGN SECURITIES. The Bond Funds may invest in foreign securities. Investments in foreign securities involve risks different from investments in U.S. securities. These risks include the risks associated with higher transaction costs, delayed settlements, currency controls and adverse economic developments. This also includes the risk that fluctuations in the exchange rates between the U.S. dollar and foreign currencies may negatively affect an investment. Adverse changes in exchange rates may erode or reverse any gains produced by foreign currency denominated investments and widen any losses. Exchange rate volatility also may affect the ability of an issuer to repay U.S. dollar denominated debt, thereby increasing credit risk. Because of these risk factors, the share price of the Funds that invest in foreign securities is expected to be volatile, and you should be able to sustain sudden, and sometimes substantial, fluctuations in the value of your investment.

For more information about risks associated with the types of investments that the Funds purchase, please read “Fund Summaries: Investments, Risk & Performance,” Appendix A and the Supplement.

PORTFOLIO QUALITY

Various rating organizations (like Standard & Poor’s Ratings Service and Moody’s Investors Service, Inc.) assign ratings to securities (other than equity securities). Generally, ratings are divided into two main categories: “Investment Grade Securities” and “Non-Investment Grade Securities.” Although there is always a risk of default, rating agencies believe

that issuers of Investment Grade Securities have a high probability of making payments on such securities. Non-Investment Grade Securities include securities that, in the opinion of the rating agencies, are more likely to default than Investment Grade Securities.

The Funds only purchase securities that meet the rating criteria described below. JPMIM will look at a security’s rating at the time of investment. If the securities are unrated, JPMIM must determine that they are of comparable quality to rated securities. Subsequent to its purchase by the Fund, a security may cease to be rated or its rating may be reduced below the minimum rating required for purchase by the Fund. JPMIM will consider such an event in determining whether the Fund should continue to hold the security.

DEBT SECURITIES

•

The Bond Funds may invest in debt securities rated in any of the four investment grade rating categories.

PREFERRED STOCK

•

The Short-Term Bond Trust, the Intermediate Bond Trust and the Core Bond Trust may invest in only preferred stock rated in any of the four highest rating categories.

MUNICIPAL SECURITIES

•

The Bond Funds may invest in only municipal bonds rated in any of the four highest rating categories.

•

The Ultra Short-Term Bond Trust, the Intermediate Bond Trust and the Core Bond Trust may invest in only other municipal securities, such as tax-exempt commercial paper, notes and variable rate demand obligations which are rated in the highest or second highest rating categories. The Short-Term Bond Trust may invest in such securities only if they are rated in the highest rating category.

COMMERCIAL PAPER

•

The Bond Funds may invest in commercial paper rated in the highest or second highest rating category.

For more information about ratings, please see “Description of Ratings” in the Supplement.

TEMPORARY DEFENSIVE POSITIONS

For liquidity and to respond to unusual market conditions, the Funds may invest all or most of their assets in cash and cash equivalents for temporary defensive purposes. These investments may result in a lower yield than lower-quality or longer-term investments, produce taxable income, and prevent the Funds from meeting their investment objectives.

WHAT IS A CASH EQUIVALENT?

Cash equivalents are highly liquid, high-quality instruments with maturities of three months or less on the date they are purchased. They include securities issued by the U.S. government, its agencies and instrumentalities, repurchase agreements (other than equity repurchase agreements), certificates of deposit, bankers’ acceptances, commercial paper (rated in one of the two highest rating categories), variable rate master demand notes, money market mutual funds and bank money market deposit accounts.

While the Funds are engaged in a temporary defensive position, they will not be pursuing their investment objectives. Therefore, the Funds will pursue a temporary defensive position only when market conditions warrant.

PORTFOLIO TURNOVER

The Funds may engage in active and frequent trading of portfolio securities to achieve their principal investment strategies. Portfolio turnover may vary greatly from year to year, as well as within a particular year.

Higher portfolio turnover rates will likely result in higher transaction costs to the Funds and may result in additional tax consequences to you.

To the extent portfolio turnover results in short-term capital gains, such gains will generally be taxed at ordinary income tax rates.

Subscribing for and Purchasing and Redeeming Fund Shares

PURCHASING FUND SHARES

Who can buy shares?

Shares of the Funds are restricted securities and are issued only in private placement transactions in accordance with Regulation D or other applicable exemptions under the Securities Act of 1933, as amended (“Securities Act”). This Memorandum does not constitute an offer to sell, or the solicitation of any offer to buy, any “security” to the public within the meaning of the Securities Act.

Shares of the Funds are not registered or qualified for sale in the states. Shares of the Funds may not be offered or sold in any state unless an exemption from registration or qualification is available. You should inquire as to whether shares of a particular Fund are available for offer and sale in your state of residence.

Shares of the Funds are offered only to certain clients of either JPMIM or its affiliates who maintain one or more separately managed private accounts, and who are “accredited investors,” within the meaning of Regulation D under the Securities Act. Eligible investors are institutional investors such as corporations, pension and profit sharing plans, financial institutions, endowments, and foundations. The Funds are not intended for individuals or accounts established for the benefit of individuals (other than certain pension and profit-sharing plans sponsored by employers or unions for the benefit of individual plan participants). If you have questions about eligibility, please contact your client relationship or client service manager.

How do I subscribe for shares?

To subscribe, an eligible investor must complete, date, execute and deliver to their client relationship or client service manager a copy of the Subscription Agreement (including the signature page contained therein) and other subscription documents which have been furnished to such investor along with this Confidential Offering Memorandum. Investors must submit all of the required documents, properly completed, at least 10 days before the date of their initial purchase (or such shorter period as the Trust may accept in its sole discretion). Subscriptions may be accepted or rejected, in whole or in part, in the sole discretion of the Trust.

Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account. When you open an account, we will ask for your name, residential or business street address, date of birth (for an individual), and other information that will allow us to identify you, including your social security number, tax identification number or other identifying number. The Funds cannot waive these requirements. The Funds are required by law to reject your Account Application if the required identifying information is not provided. Once we have received all of the required information, federal law requires us to verify your identity. After an account is opened, we may restrict your ability to purchase additional shares until your identity is verified. If we are unable to verify your identity within a reasonable time, the Funds reserve the right to close your account at the current day’s NAV.

What are the minimum investment amounts?

•

The minimum initial investment for shares of the JPMorgan Equity Index Trust is $10,000,000. For the Bond Funds, the minimum initial investment is $25,000,000 per Fund.

•

You are required to maintain a minimum account balance equal to the minimum initial investment in each Fund.

•

The Funds reserve the right to waive any investment minimum. For further information on investment minimum waivers, contact your client relationship or client service manager.

When can I buy shares?

•

Purchases may be made on any business day. This includes any day that the Funds are open for business, other than weekends and days on which the New York Stock Exchange (“NYSE”) is closed, including the following holidays: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Investors should contact their client relationship or client service manager to make initial investment requests and in order to request to purchase additional shares.

•

Purchase requests received by the Fund or an authorized agent of the Fund in proper form before 4:00 p.m. Eastern Time (“ET”) will be effective that day. On occasion, the NYSE will close before 4:00 p.m. ET. When that happens, purchase requests received by the Fund or an authorized agent of the Fund after the NYSE closes will be effective the following business day.

•

Shares are electronically recorded. Therefore, certificates will not be issued.

•

The Funds do not authorize market timing and, except for the JPMorgan Ultra Short Term Bond Trust and the JPMorgan Short Term Bond Trust, use reasonable methods to seek to identify market timers and to prevent such activity. However, there can be no assurance that these methods will prevent market timing or other trading that may be deemed abusive. Market timing is an investment strategy using frequent purchases, redemptions and/or exchanges in an attempt to profit from short-term market movements. Market timing may result in dilution of the value of Fund shares held by long-term shareholders, disrupt portfolio management and increase Fund expenses for all shareholders. Although market timing may affect any Fund, these risks may be higher for Funds that invest significantly in non-U.S. securities or thinly traded securities (e.g., certain small cap securities), such as international, global or emerging market funds or small cap funds. For example, when a Fund invests in securities trading principally in non-U.S. markets that close prior to the close of the NYSE, market timers may seek to take advantage of the difference between the prices of these securities at the close of their non-U.S. markets and the value of such securities when the Fund calculates its net asset value. The Funds will prohibit any purchase order (including exchanges) with respect to one investor, a related group of investors or their agent(s), where they detect a pattern of either purchases and sales of the Funds, that indicates market timing or trading that they determine is abusive.

•

The Funds’ Board of Trustees has adopted policies and procedures that use a variety of methods to identify market timers, including reviewing “round trips” in and out of the Funds by investors. A “round trip” includes a purchase or exchange into a Fund followed by a redemption or exchange out of the same Fund. The Fund will reject your purchase orders if it detects that you have completed two round trips within 60 days within the same Fund. In identifying market timers, the Fund may also consider activity of accounts that it believes to be under common ownership or control.

•

Market timers may disrupt portfolio management and harm Fund performance. To the extent that the Funds are unable to identify market timers effectively, long-term investors may be adversely affected. Although the Funds use a variety of methods to detect and deter market timing, there is no assurance that the Funds will be able to identify and eliminate all market timers. For example, certain accounts, which are known as omnibus accounts, include multiple investors and such accounts typically provide the Funds with a net purchase or redemption order on any given day where purchasers of Fund shares and redeemers of Fund shares are netted against one another and the identity of individual purchasers and redeemers whose orders are aggregated are not known by the Funds. While the Funds seek to monitor for market timing activities in omnibus accounts, the netting effect often makes it more difficult to locate and eliminate individual market timers from the Funds and there can be no assurances that the Funds will be able to do so.

•

Subject to the foregoing, the Funds will seek to apply these policies and restrictions as uniformly as practicable, except in cases of purchases, redemptions and exchanges made on a systematic basis, automatic

reinvestments of dividends and distributions or purchases, redemptions or exchanges that are part of a rebalancing program, such as a wrap program, or as part of a bona fide asset allocation program. Please see the Supplement for a further description of these arrangements.

•

The JPMorgan Ultra Short Term Bond Trust and the JPMorgan Short Term Bond Trust are intended for short-term investment horizons and do not monitor for market timers or prohibit such short-term trading activity. Although these Funds will be managed in a manner that is consistent with their investment objectives, frequent trading by shareholders may disrupt their management and increase their expenses.

•

In addition to rejecting purchase orders in connection with suspected market timing activities, the Fund can reject a purchase order (including purchase orders for the Funds listed above) for any reason, including purchase orders that it does not think are in the best interests of a Fund and/or its shareholders or if it determines the procedures for identifying market timers and rejecting or otherwise restricting purchase orders and/or exchanges.

How much do shares cost?

•

Shares are sold at net asset value (“NAV”).

•

NAV per share is calculated by dividing the total market value of a Fund’s investments and other assets (minus liabilities) by the number of outstanding shares in that class.

•

The market value of a Fund’s investments is determined primarily on the basis of readily available market quotations. Certain short-term securities are valued at amortized cost, which approximates market value. If market quotations are not readily available or if available market quotations are determined not to be reliable or if a security’s value has been materially affected by events occurring after the close of trading on the exchange or market on which the security is principally traded (for example, a natural disaster affecting an entire country or region, or an event that affects an individual company), but before a Fund’s NAV is calculated, that security may be valued at its fair value in accordance with policies and procedures adopted by the Funds’ Board of Trustees. A security’s valuation may differ depending on the method used for determining value. Shareholders who purchase or redeem shares when NAV has been determined using fair valuation procedures may receive a number of shares or redemption proceeds that is greater or lower than they would have received if securities were not valued using the Trust’s fair valuation procedures. The Board of Trustees receives regular reports concerning the operations of the fair valuation procedures.

•

A Fund’s NAV changes every day. NAV is calculated each business day following the close of the NYSE at 4:00 p.m. ET. On occasion, the NYSE will close before 4:00 p.m. ET. When that happens, NAV will be calculated as of the time the NYSE closes.

REDEEMING FUND SHARES

As stated above, the Funds’ shares are restricted securities that may not be sold to investors other than “accredited investors” within the meaning of Regulation D under the Securities Act.

Shares of the funds may not be assigned, resold or otherwise transferred without the prior written consent of the Trust and, if requested, an opinion of counsel acceptable to the Trust that an exemption from registration is available. Any attempt to transfer to a third party in violation of this provision shall be void. The Trust may enforce this paragraph, either directly or through its agents, by entering an appropriate stop-transfer order on its books or otherwise refusing to register or transfer or permit the registration or transfer on its books of any purported transfer not in accordance with these restrictions.

When can I redeem shares?

You may redeem all or some of your shares on any day that the Funds are open for business.

Redemption orders accepted by a Fund or an authorized agent of the Fund before 4:00 p.m. ET (or before the NYSE closes, if the NYSE closes before 4:00 p.m. ET) will be effective that day at the day’s price.

How do I redeem shares?

To redeem all or some of your shares on any day that the Funds are open for business, contact your client relationship or client service manager.

Normally, your redemption proceeds will be paid within one to seven days after receipt of the redemption order.

What will my shares be worth?

If the Fund or an authorized agent of the Fund accepts your redemption order before 4:00 p.m. ET (or before the NYSE closes if the NYSE closes before 4:00 p.m. ET), your redemption order will be effective at that day’s price. If the Fund or its authorized agent accepts your redemption order after 4:00 p.m. ET (or after the NYSE closes if the NYSE closes before 4:00 p.m. ET), your redemption order will be effective at the price per share next calculated after your order is accepted.

Additional information regarding redemptions

Generally, all redemptions will be for cash. However, if you redeem shares worth $250,000 or more, the Fund reserves the right to pay part or all of your redemption proceeds in readily marketable securities instead of cash. If payment is made in securities, the Fund will value the securities selected in the same manner that it computes its NAV. This process seeks to minimize the adverse effect of large redemptions on the Fund and its remaining shareholders.

The Funds may suspend your ability to redeem when:

Trading on the NYSE is restricted;

The NYSE is closed (other than weekend or holiday closings);

Federal securities laws permit;

The SEC has permitted a suspension; or

An emergency exists, as determined by the SEC.

See “Additional Purchase and Redemption Information” in the Confidential Offering Memorandum Supplement for more details about this process.

You generally will recognize a gain or loss on a redemption for federal income tax purposes. You should talk to your tax advisor before making a redemption.

Additional information regarding your account

Investors in the Funds must be separate account clients of JPMIM or its affiliates and the terms and conditions of the account agreement between JPMIM (or other JPMorgan affiliate) and the investor will govern the account relationship and account investments, including investments in shares of the Funds.

Shareholder Information

VOTING RIGHTS

The Funds do not hold annual shareholder meetings, but may hold special meetings. The special meetings are held, for example, to elect or remove Trustees, change a Fund’s fundamental investment objective or approve an investment advisory contract.

As a Fund shareholder, you have one vote for each share that you own. Each Fund votes separately on matters relating solely to that Fund, or which affect that Fund differently. However, all shareholders of the Funds will have equal voting rights on matters that affect all shareholders of the Funds equally.

DIVIDEND POLICIES

Dividends

The Funds generally declare dividends on the last business day of each month. Dividends are distributed on the first business day of each month. Capital gains, if any, for all Funds are distributed at least annually.

The Funds pay dividends and distributions on a per-share basis. This means that the value of your shares will be reduced by the amount of the payment. If you purchase shares shortly before the record date for a dividend or the distribution of capital gains, you will pay the full price for the shares and receive a portion of the price back as a taxable dividend or distribution.

Dividend Reinvestment

You automatically will receive all income dividends and capital gain distributions in additional shares of the same Fund, unless you have elected to take such payments in cash. The price of the shares of each Fund is the NAV determined immediately following the dividend record date. Reinvested dividends and distributions receive the same tax treatment as dividends and distributions paid in cash and thus are currently taxable.

TAX TREATMENT OF SHAREHOLDERS

Taxation of Shareholder Transactions

A sale, exchange or redemption of Fund shares generally may produce either a taxable gain or a loss. You are responsible for any tax liabilities generated by your transactions. For more information about your specific tax situation, please consult your tax advisor.

Taxation of Distributions

Each Fund will distribute substantially all of its net investment income (including, for this purpose, the excess of net short-term capital gains over net long-term capital losses) and net capital gains (i.e., the excess of net long-term capital gains over net short-term capital losses) on at least an annual basis. For federal income tax purposes, distributions of investment income are generally taxable as ordinary income. Taxes on distributions of capital gains are determined by how long a Fund owned the investments that generated them, rather than how long you have owned your shares. Distributions of net capital gains from the sale of investments that a Fund owned for more than one year and that are properly designated by a Fund as capital gain dividends will be taxable as long-term capital gains. Distributions of gains from the sale of investments that a Fund owned for one year or less will be taxable to you as ordinary income. For taxable years beginning on or before December 31, 2008, distributions of investment income designated by a Fund as derived from “qualified dividend income” will be taxed in the hands of individuals at the rates applicable to long-term capital gain provided holding period and other requirements are met at both the shareholder and Fund level. The Funds do not expect a significant portion of their distributions to be derived from qualified dividend income.

Distributions are taxable to you even if they are paid from income or gains earned by a Fund before your investment (and thus were included in the price you paid). Distributions are taxable whether you received them in cash or reinvested them in additional shares through the dividend reinvestment plan. Any gain resulting from the sale or exchange of Fund shares generally will be taxable as capital gains. A Fund may produce capital gains even if it does not have income to distribute and performance has been poor.

Long-term capital gain rates applicable to individuals have been temporarily reduced-in general, to 15% with lower rates applying to taxpayers in the 10% and 15% rate brackets-for taxable years beginning on or before December 31, 2008.

Dividends paid in January, but declared in October, November or December of the previous year, will be considered to have been paid in the previous year.

Taxation of Zero Coupon Securities

Some of the Funds may acquire certain securities issued with original issue discount (including zero coupon securities). Current federal tax law requires that a holder (such as a Fund) of such a security must include in taxable income a portion of the original issue discount which accrues during the tax year on such security even if a Fund receives no payment in cash on the security during the year. As an investment company, a Fund must pay out substantially all of its net investment income each year, including any original issue discount. Accordingly, a Fund may be required to pay out in income distribution each year an amount which is greater than the total amount of cash interest a Fund actually received. Such distributions will be made from the cash assets of a Fund or by liquidation of investments if necessary. If a distribution of cash necessitates the liquidation of investments, JPMIM will select which securities to sell and a Fund may realize a gain or loss from those sales. In the event a Fund realizes net capital gains from these transactions, you may receive a larger capital gain distribution, if any, than you would in the absence of such transactions.

Taxation of Foreign Investments

The Funds’ investments in foreign securities may be subject to foreign withholding. In that case, the yield on those securities would be reduced. You may, however, be entitled to claim a credit or deduction with respect to foreign taxes. In addition, a Fund’s investments in foreign securities or foreign currencies may increase or accelerate the Fund’s recognition of ordinary income and may affect the timing or amount of the Fund’s distributions.

Taxation of Retirement Plans

Distributions by the Funds to qualified retirement plans generally will not be taxable. However, if shares are held by a plan that ceases to qualify for tax-exempt treatment or by an individual who has received shares as a distribution from a retirement plan, the distributions will be taxable to the plan or individual as described in “Tax Treatment of Shareholders.” If you are considering purchasing shares with qualified retirement plan assets, you should consult your tax advisor for a more complete explanation of the federal, state, local and (if applicable) foreign tax consequences of making such an investment.

Tax Information

The Form 1099 that is mailed to you every January details your dividends and their federal tax category. Even though the Funds provide you with this information, you are responsible for verifying your tax liability with your tax professional. For additional tax information, see the Supplement. Please note that this tax discussion is general in nature; no attempt has been made to present a complete explanation of the federal, state, local or foreign tax treatment of the Funds or their shareholders. For additional information on the potential tax consequences of investing in the Funds, please see the Supplement.

SHAREHOLDER STATEMENTS AND REPORTS

The Funds or your JPMorgan client relationship or client service manager will send you transaction confirmation statements and quarterly account statements. Please review these statements carefully. The Funds will correct errors if notified within one year of the date printed on the transaction confirmation or account statement.

Annually you will receive an audited financial report from the Funds. In addition, the Funds will periodically send you proxy statements and other reports.

If you have any questions or need additional information, please contact your client relationship or client service manager.

AVAILABILITY OF PROXY VOTING RECORD

The Trustees have delegated the authority to vote proxies for securities owned by the Funds to JPMIM. A copy of each Fund’s voting record for the most recent 12-month period is available on the SEC’s website at www.sec.gov or by calling the following toll-free number: 1-800-343-1113. Each Fund’s proxy voting record will include, among other things, a brief description of the matter voted on for each portfolio security and state how each vote was cast, for example, for or against the proposal.

PORTFOLIO HOLDINGS DISCLOSURE

No sooner than thirty days after the end of each month, each Fund will make available upon request a complete uncertified schedule of its portfolio holdings as of the last day of that month. Not later than sixty days after the end of each quarter, each Fund will make available a complete, certified schedule of its portfolio holdings as of the last day of that quarter. In addition to providing hard copies upon request, the Funds will post these quarterly schedules on the SEC’s EDGAR filing system at www.sec.gov.

Shareholders may request portfolio holdings schedules at no charge by contacting their client relationship or client service manager.

A description of the Funds’ policies and procedures with respect to the disclosure of the Funds’ portfolio holdings is available in the Supplement.

Management of the Funds

THE ADVISER

Pursuant to the Investment Advisory Agreement (the “Advisory Agreement”), between the Trust on behalf of the Funds and JPMIM, JPMIM serves as investment adviser to the Funds.

Subject to the supervision of the Funds’ Trustees, JPMIM makes the Funds’ day-to-day investment decisions, arranges for the execution of Fund transactions and generally manages the Funds’ investments. JPMIM is a wholly owned subsidiary of JPMorgan Asset Management Holdings, Inc., which is a wholly owned subsidiary of JPMorgan Chase & Co., a bank holding company. JPMIM is a registered investment adviser under the Investment Advisers Act of 1940, as amended (“Advisers Act”), JPMIM acts as investment adviser to individuals, governments, corporations, employee benefit plans, labor unions and state and local governments, mutual funds and other institutional investors. JPMIM is located at 522 Fifth Avenue, New York, NY 10036.

ADVISORY FEES

JPMIM is paid a fee based on an annual percentage of the average daily net assets of each Fund. The Trust has entered into an investment advisory agreement with JPMIM under which JPMIM is entitled to the following advisory fees with respect to each Fund:


FUND		ANNUAL RATE AS PERCENTAGE OF AVERAGE DAILY NET ASSETS
JPMorgan Ultra Short-Term Bond Trust		0.25%
JPMorgan Short-Term Bond Trust		0.25%
JPMorgan Intermediate Bond Trust		0.30%
JPMorgan Core Bond Trust		0.30%
JPMorgan Equity Index Trust		0.25%

However, in the interest of limiting total expenses of the Fund, JPMIM and the Trust’s Administrator have entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”), pursuant to which JPMIM and the Trust’s Administrator have agreed to waive or limit its fees and to assume other expenses so that the total annualized fund operating expenses (other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with generally accepted accounting principles, placement related expenses (if any), and other extraordinary expenses not incurred in the ordinary course of the Fund’s business) are limited to the following amounts with respect to each Fund: 0.10% of the average daily net assets of the JPMorgan Ultra Short-Term Bond Trust, JPMorgan Short-Term Bond Trust, and JPMorgan Equity Index Trust, and 0.15% of the average daily net assets of the JPMorgan Intermediate Bond Trust and JPMorgan Core Bond Trust, for the period beginning September 30, 2004 through October 31, 2006.

In addition to the foregoing fees, a separate account client of JPMIM or its affiliates may also incur investment advisory fees, servicing fees and other fees in connection with the maintenance of the client’s separately managed account with JPMIM or its affiliates.

THE FUND MANAGERS

Bond Funds. The Bond Funds are managed by portfolio managers teamed with research analysts. The portfolio managers work together to establish general duration, sector and yield curve strategies for the Funds. The research analysts provide individual security and sector recommendation regarding their area of focus, while the portfolio managers select and allocate individual securities in a manner designed to meet the investment objectives of the Funds.

JPMorgan Ultra Short-Term Bond Trust. Michael Sais, CFA, is the lead portfolio manager responsible for the day-to-day management of the JPMorgan Ultra Short Term Bond Trust, a position he has held at JPMIM since the Fund’s inception. In addition to his role at JPMIM, Mr. Sais also serves as lead portfolio manager on behalf of JPMorgan Investment Advisors (formerly Banc One Investment Advisors), an affiliate of JPMIM, for the JPMorgan Ultra Short-Term Bond Fund. Mr. Sais joined JPMorgan Investment Advisors in 1994 as a senior fixed income research analyst responsible for the valuation and analysis of the mortgage-backed securities market. He is also a Fixed Income Fund Manager for the Insurance Asset Management Team responsible for managing investments consistent with the unique requirements of insurance industry clients. Gregg F. Hrivnak and Richard D. Figuly also participate in the management of the JPMorgan Ultra Short-Term Bond Trust. Mr. Hrivnak is a portfolio manager and trader on the Core Bond Team. In addition to his role at JPMIM, Mr. Hrivnak has been an employee of JPMorgan Investment Advisors since 1989 where he previously was a fixed income research analyst for the Taxable Bond Team responsible for asset-backed securities. Mr. Figuly is a member of the Columbus Taxable Bond Team responsible for trading fixed income securities with an emphasis on asset-backed securities. In addition to his role of JPMIM, Mr. Figuly has been an employee of JPMorgan Investment Advisors since 1994 where he began as a fiduciary tax accountant and then transitioned to fixed income trading.

JPMorgan Short-Term Bond Trust. Ricardo Cipicchio, CFA, is the lead portfolio manager responsible for the day-to-day management of the JPMorgan Short-Term Bond Trust. In addition to his role at JPMIM, Mr. Cipicchio also serves as lead portfolio manager on behalf of JPMorgan Investment Advisors for the JPMorgan Short Duration Bond Fund. Mr. Cipicchio is a member of the Taxable Bond Team. He also manages numerous large institutional accounts. Prior to joining JPMorgan Investment Advisors in 1998, Mr. Cipicchio was a first vice

president and manager of the Pegasus Short Bond and Multi Sector Bond Funds at First Chicago NBD. He was also the associate manager of the Pegasus Bond and Intermediate Bond Funds as well as institutional portfolios. Gregg Hrivnak also participates in the management of this Fund. Biographical information on Mr. Hrivnak is described above under the JPMorgan Ultra Short-Term Bond Trust.

JPMorgan Intermediate Bond Trust and JPMorgan Core Bond Trust. Douglas Swanson is the lead portfolio manager responsible for the day-to-day management of the JPMorgan Intermediate Bond Trust and the JPMorgan Core Bond Trust. He is responsible for establishing daily tactical decision-making for all taxable bond money management as it relates to strategic investment policy and benchmarking, composite and investment style oversight and performance oversight. In addition to his role at JPMIM, Mr. Swanson also serves as lead portfolio manager on behalf of JPMorgan Investment Advisors for the JPMorgan Intermediate Bond Fund and the JPMorgan Core Bond Fund. Prior to joining JPMorgan Investment Advisors in 1998, Mr. Swanson was first vice president and manager at First Chicago NBD Corporation, where he worked on government/corporate securities and managed various Pegasus Funds. Scott F. Grimshaw also participates in the management of the JPMorgan Intermediate Bond Trust. Mr. Grimshaw is the portfolio manager of the JPMorgan Treasury & Agency Fund and part of the Taxable Bond Team. He is also responsible for the government and derivatives sectors. Prior to his current role, Mr. Grimshaw served as a senior fixed income analyst and portfolio manager. He obtained a B.S. in finance from Miami University and an M.B.A. from Ohio State University. He is a member of the Association for Investment Management and Research as well as the Columbus Society of Financial Analysts. Ricardo Cippichio also participates in the management of the JPMorgan Core Bond Trust. Biographical information for Mr. Cippichio is described above under the JPMorgan Short-Term Bond Trust.

Equity Index Trust. The Equity Index Trust is managed by the Quantitative Team which is led by Bala Iyer, Ph.D., CFA. In addition to the Quantitative Team’s role at JPMIM, the Quantitative Team is also responsible for the JPMorgan Equity Index Fund, the JPMorgan Multi-Cap Market Neutral Fund, and the JPMorgan International Equity Fund. Dr. Iyer joined JPMIM in 2005. In addition, Dr. Iyer has served as the director of quantitative research for JPMorgan Investment Advisors since 1995. Michael Loeffler, CFA, is the portfolio manager responsible for the day-to-day management of the Equity Index Trust, a position he has held since the Fund’s inception. In addition to his role at JPMIM, Mr. Loeffler also serves as portfolio manager for the JPMorgan Equity Index Fund, a position he has held since January 2004. Mr. Loeffler has been employed by JPMorgan Investment Advisors since 1999 when he joined as an investment operations analyst.

The Supplement provides additional information about the other accounts managed by the portfolio managers, the structure of their compensation, and their ownership of securities.

JPMORGAN INVESTMENT ADVISORS – RELATED PERFORMANCE

The Funds are advised by JPMIM. JPMIM is an affiliate of JPMorgan Investment Advisors Inc., an indirect, wholly-owned subsidiary of JPMorgan Chase & Co. The portfolio managers and other personnel responsible for managing the Funds (the “Portfolio Management Team”) are also responsible for managing registered investment companies and separate accounts advised by JPMorgan Investment Advisors. The Portfolio Management Team manages one other registered investment company that has substantially similar investment objectives, policies, strategies and risks as the Ultra Short-Term Bond Trust. Such other registered investment company is the only other account or registered investment company managed in a substantially similar manner as the Ultra Short Term Bond Trust. The investment result presented below are unaudited. The performance data presented below does not represent the performance of the Ultra Short-Term Bond Trust. You should not consider this performance data as an indication of the future performance of the Fund or of JPMorgan Investment Advisors, JPMIM, or the Portfolio Management Team

JPMorgan Investment Advisors — JPMorgan Ultra Short-Term Bond Fund


Calendar Year	JPMorgan Ultra Short-Term Bond Fund¹		Lehman Brothers Short 9-12 Month Index²
1995	6.98	%	7.95	%
1996	6.15	%	5.74	%
1997	6.65	%	6.07	%
1998	5.31	%	6.07	%
1999	4.55	%	4.40	%
2000	7.60	%	6.76	%
2001	6.02	%	6.56	%
2002	4.58	%	2.97	%
2003	2.14	%	1.44	%
2004	2.04	%	0.93	%

Annualized Period	Ultra Short-Term Bond Fund¹		Lehman Brothers Short 9-12 Month Index²
1 Yr. Ended 9/30/05	2.48	%	1.89	%
3 Yr. Ended 9/30/05	2.28	%	1.54	%
5 Yr. Ended 9/30/05	3.81	%	3.12	%
10 Yr. Ended 9/30/05	4.87	%	4.42	%
Inception (through 9/30/05)	4.69	%	4.48	%

The information presented is for the JPMorgan Ultra Short-Term Bond Composite. The performance presented consists of a single registered investment company managed in a substantially similar style as the JPMorgan Ultra Short-Tem Bond Trust. Performance information is provided net of expenses of the Select Class Shares of JPMorgan Ultra Short-Term Bond Fund absent any fee waivers or expense reimbursements. These expenses are higher than the expenses of the JPMorgan Ultra Short-Term Bond Trust. The net performance represents total return, assuming reinvestment of all dividends and proceeds from capital transactions.

The Lehman Brothers Short 9-12 Month U.S. Treasury Index is an unmanaged index which includes aged U.S. Treasury notes and bonds with a remaining maturity from nine up to (but not including) twelve months. It excludes zero coupon strips. The performance of the index does not reflect the deduction of expenses associated with a mutual fund, such as investment management fees.

With respect to the other Funds of the Trust, the Portfolio Management Team through JPMorgan Investment Advisors, manages registered investment companies and separate accounts (collectively, the “Accounts”) in a substantially similar manner as the Funds. The following tables show the historical performance of all Accounts managed by JPMorgan Investment Advisors, which have substantially similar investment objectives, policies, strategies and risks as the Funds. These composites are provided to illustrate the past performance of the Portfolio Management Team in managing substantially similar Accounts. However, the performance data and composites do not represent the performance of the Funds. You should not consider this performance data as an indication of the future performance of the Fund or of JPMorgan Investment Advisors, JPMIM, or the Portfolio Management Team. The Accounts that are included in the composites other than the registered investment companies are not subject to the same types of expenses to which the Funds are subject nor to the diversification requirements, specific tax restrictions and investment limitations imposed on the Funds by the Investment Company Act of 1940, as amended, or Subchapter M of the Internal Revenue Code of 1986, as amended. Consequently, the performance results for the composite could have been adversely affected if all of the Accounts included in the composites had been regulated as investment companies under the federal securities laws.

The investment results of the composites presented below are unaudited. The investment results of the composites were not calculated pursuant to the methodology established by the Securities and Exchange Commission that is used to calculate performance results of the Funds. Rather, the performance results for the composites were calculated on a time weighted basis and include all dividends and interest, accrued income and realized and unrealized gains and losses. The composite performance has been adjusted to reflect the total annual fund operating expenses for Select Class Shares of a registered investment company included in the composite absent any fee waivers or expense reimbursements. Securities transactions are accounted for on the trade date and accrual accounting is utilized. Cash and cash equivalents are included in performance returns. Returns are calculated by geometrically linking the monthly and quarterly returns respectively. There is no use of leverage or derivatives. Investors should also be aware that the use of a methodology different from what is used below to calculate performance could result in different performance data.

JPMorgan Investment Advisors — Short-Term Bond Composite


Calendar Year	Short-Term Bond Composite¹		Lehman Brothers 1-3 Year Government/ Credit Index²
1995	10.46	%	10.96	%
1996	4.50	%	5.14	%
1997	6.05	%	6.66	%
1998	6.33	%	6.98	%
1999	2.89	%	3.15	%
2000	7.59	%	8.08	%
2001	7.81	%	8.78	%
2002	6.09	%	6.28	%
2003	2.13	%	2.81	%
2004	0.98	%	1.30	%

Annualized Period	Short-Term Bond Composite¹		Lehman Brothers 1-3 Year Government/ Credit Index²
1 Yr. Ended 9/30/05	0.97	%	1.19	%
3 Yr. Ended 9/30/05	1.71	%	2.14	%
5 Yr. Ended 9/30/05	4.07	%	4.55	%
10 Yr. Ended 9/30/05	4.76	%	5.25	%
Inception (through 9/30/05)	5.92	%	6.29	%

The information presented is for JPMorgan Investment Advisors’ Short-Term Bond Fund. The composite performance contains information from the separate accounts and a registered investment company managed in a substantially similar style as the JPMorgan Short Term Bond Trust. The net performance represents total return, assuming reinvestment of all dividends and proceeds from capital transactions. The composite performance has been adjusted to reflect the total annual fund operating expenses for Select Class Shares of a registered investment company included in the composite absent any fee waivers or expense reimbursements. These expenses are higher than the expenses of the Fund.

The Lehman Brothers 1-3 Year Government/Credit Index is an unmanaged index with a broad measure of the performance of short-term government and corporate fixed-rate debt issues. The performance of the index does not reflect the deduction of expenses associated with a mutual fund, such as investment management fees.

JPMorgan Investment Advisors – Intermediate Bond Composite


Calendar Year	Intermediate Bond Composite¹		Lehman Brothers Intermediate Government/Credit Bond Index²
1995	19.17	%	15.33	%
1996	5.49	%	4.05	%
1997	8.15	%	7.87	%
1998	7.75	%	8.44	%
1999	0.61	%	0.39	%
2000	9.95	%	10.12	%
2001	8.16	%	8.96	%
2002	9.43	%	9.84	%
2003	3.68	%	4.31	%
2004	3.35	%	3.04	%

Annualized Period	Intermediate Bond Composite¹		Lehman Brothers Intermediate Government/Credit Bond Index²
1 Yr. Ended 9/30/05	1.96	%	1.50	%
3 Yr. Ended 9/30/05	3.22	%	3.37	%
5 Yr. Ended 9/30/05	5.89	%	6.15	%
10 Yr. Ended 9/30/05	6.18	%	6.11	%
Inception (through 9/30/05)	7.11	%	7.37	%

The information presented is for JPMorgan Investment Advisors’ Intermediate Bond Composite. The composite performance contains information from the separate accounts and a registered investment company managed in a substantially similar style as the JPMorgan Intermediate Bond Trust. The net performance represents total return, assuming reinvestment of all dividends and proceeds from capital transactions. The composite performance has been adjusted to reflect the total annual fund operating expenses for Select Class Shares of a registered investment company included in the composite absent any fee waivers or expense reimbursements. These expenses are higher than the expenses of the Fund.

The Lehman Brothers Intermediate Government/Credit Bond Index is an unmanaged index comprised of U.S. government agency and Treasury securities and investment grade corporate bonds. The performance of the index does not reflect the deduction of expenses associated with a mutual fund, such as investment management fees.

JPMorgan Investment Advisors — Core Bond Composite


Calendar Year	Core Bond Composite¹		Lehman Brothers Aggregate Bond Index²
1995	23.38	%	18.47	%
1996	4.89	%	3.63	%
1997	9.95	%	9.65	%
1998	8.09	%	8.69	%
1999	(0.58	)%	(0.82	)%
2000	11.89	%	11.63	%
2001	8.36	%	8.44	%
2002	10.11	%	10.26	%
2003	3.88	%	4.10	%
2004	4.20	%	4.34	%

*Annualized Period*	Core Bond Composite¹		Lehman Brothers Aggregate Bond Index²
1 Yr. Ended 9/30/05	2.47	%	2.80	%
3 Yr. Ended 9/30/05	3.72	%	3.96	%
5 Yr. Ended 9/30/05	6.55	%	6.62	%
10 Yr. Ended 9/30/05	6.73	%	6.55	%
Inception (through 9/30/05)	7.90	%	7.96	%

The information presented is for JPMorgan Investment Advisors’ Core Bond Composite. The composite performance contains information from the separate accounts and two registered investment companies managed in a substantially similar style as the JPMorgan Core Bond Trust. The net performance represents total return, assuming reinvestment of all dividends and proceeds from capital transactions. The composite performance has been adjusted to reflect the total annual fund operating expenses for Select Class Shares of a registered investment company included in the composite absent any fee waivers or expense reimbursements. These expenses are higher than the expenses of the Fund.

2.	The Lehman Brothers Aggregate Bond Index is an unmanaged index generally representative of the bond market as a whole. The performance of the index does not reflect the deduction of expenses associated with a mutual fund, such as investment management fees.

JPMorgan Investment Advisors – Equity Index Composite


Calendar Year	Equity Index Composite¹		S&P 500 Index²
1995	36.49	%	37.58	%
1996	22.06	%	22.96	%
1997	32.49	%	33.36	%
1998	27.79	%	28.58	%
1999	20.10	%	21.04	%
2000	(9.63	)%	(9.10	)%
2001	(12.51	)%	(11.89	)%
2002	(22.58	)%	(22.10	)%
2003	27.73	%	28.69	%
2004	10.05	%	10.88	%

*Annualized Period*	Equity Index Composite¹		S&P 500 Index²
1 Yr. Ended 9/30/05	11.47	%	12.25	%
3 Yr. Ended 9/30/05	15.9	%	16.72	%
5 Yr. Ended 9/30/05	(2.17	)%	(1.49	)%
10 Yr. Ended 9/30/05	8.73	%	9.49	%
Inception (through 9/30/05)	10.76	%	11.64	%

The information presented is for JPMorgan Investment Advisors’ Equity Index Composite. The composite performance contains information from the separate accounts and two registered investment companies managed in a substantially similar style as the JPMorgan Equity Index Trust. The net performance represents total return, assuming reinvestment of all dividends and proceeds from capital transactions. The composite performance has been adjusted to reflect the total annual fund operating expenses for Select Class Shares of a registered investment company included in the composite absent any fee waivers or expense reimbursements. These expenses are higher than the expenses of the Fund.

2.	The S&P 500 is an unmanaged index generally representative of the performance of large companies in the U.S. stock market. The performance of the index does not reflect the deduction of expenses associated with a mutual fund, such as investment management fees.

Appendix A

INVESTMENT PRACTICES

The Funds invest in a variety of securities and employ a number of investment techniques. Each security and technique involves certain risks. What follows is a list of some of the securities and techniques utilized by the Funds, as well as the risks inherent in their use. Equity securities are subject mainly to market risk. Fixed income securities are primarily influenced by market, credit and prepayment risks, although certain securities may be subject to additional risks. For a more complete discussion, see the Supplement. Following the table is a more complete discussion of risk.


FUND NAME		FUND CODE
JPMorgan Ultra Short-Term Bond Trust		1
JPMorgan Short-Term Bond Trust		2
JPMorgan Intermediate Bond Trust		3
JPMorgan Core Bond Trust		4
JPMorgan Equity Index Trust		5


Instrument	Fund Code	Risk Type
Adjustable Rate Mortgage Loans (“ARMs”): Loans in a mortgage pool which provide for a fixed initial mortgage interest rate for a specified period of time, after which the rate may be subject to periodic adjustments.	1-4	Prepayment Market Credit Regulatory

Asset-Backed Securities: Securities secured by company receivables, home equity loans, truck and auto loans, leases, credit card receivables and other securities backed by other types of receivables or other assets.	1-4	Prepayment Market Credit Regulatory

Bankers’ Acceptances: Bills of exchange or time drafts drawn on and accepted by a commercial bank. Maturities are generally six months or less.	1-5	Credit Liquidity Market

Call and Put Options: A call option gives the buyer the right to buy, and obligates the seller of the option to sell, a security at a specified price at a future date. A put option gives the buyer the right to sell, and obligates the seller of the option to buy, a security at a specified price at a future date. The Funds will sell only covered call and secured put options.	1-5	Management Liquidity Credit Market Leverage

Certificates of Deposit: Negotiable instruments with a stated maturity.	1-5	Market Credit Liquidity

Commercial Paper: Secured and unsecured short-term promissory notes issued by corporations and other entities. Maturities generally vary from a few days to nine months.	1-5	Credit Liquidity Market

Common Stock: Shares of ownership of a company.	5	Market

Convertible Securities: Bonds or preferred stock that can convert to common stock.	1, 3-5	Market Credit

Corporate Debt Securities: Corporate bonds and non-convertible debt securities.	1-4	Market Credit


Instrument	Fund Code	Risk Type
Demand Features: Securities that are subject to puts and standby commitments to purchase the securities at a fixed price (usually with accrued interest) within a fixed period of time following demand by a Fund.	1-4	Market Liquidity Management

Exchanged-Traded Funds: Ownership in unit investment trusts, depositary receipts, and other pooled investment vehicles that hold a portfolio of securities or stocks designed to track the price performance and dividend yield of a particular broad based, sector or international index. Exchange-traded funds or ETFs include a wide range of investments such as iShares, Standard and Poor’s Depository Receipts (SPDRs), and NASDAQ 100’s. The Equity Index Trust invests only in SPDRs and other ETFs that track the S&P 500.	5	Market

Fixed Rate Mortgage Loans: Investments in fixed rate mortgage loans or mortgage pools which bear simple interest at fixed annual rates and have short to long term final maturities.	1-4	Credit Prepayment Regulatory Market

Foreign Securities: Securities issued by foreign companies, debt securities issued or guaranteed by foreign governments or any of their agencies and instrumentalities, as well as commercial paper of foreign issuers and obligations of foreign banks, overseas branches of U.S. banks and supranational entities.	1-4	Market Political Liquidity Foreign Investment

Futures and Related Options: A contract providing for the future sale and purchase of a specified amount of a specified security, class of securities, or an index at a specified time in the future and at a specified price.	1-5	Management Market Credit Liquidity Leverage

Inverse Floating Rate Instruments: Floating rate debt instruments with interest rates that reset in the opposite direction from the market rate of interest to which the inverse floater is indexed.	1-4	Market Leverage Credit

Investment Company Securities: Shares of other mutual funds, including money market mutual funds for which JPMIM or its affiliates serve as investment adviser or administrator. JPMIM will waive certain fees when investing in funds for which it serves as investment adviser to the extent required by law.	1-5	Market

Loan Participations and Assignments: Participations in, or assignments of all or a portion of loans to corporations or to governments, including governments of less developed countries (“LDCs”).	1-4	Credit Political Liquidity Foreign Investment Market Tax

Mortgage-Backed Securities: Debt obligations secured by real estate loans and pools of loans. These include collateralized mortgage obligations (“CMOs”) and Real Estate Mortgage Investment Conduits (“REMICs”).	1-4	Prepayment Market Credit Regulatory Leverage

Mortgage Dollar Rolls: A transaction in which a Fund sells securities for delivery in a current month and simultaneously contracts with the same party to repurchase similar but not identical securities on a specified future date.	1-4	Prepayment Market Regulatory Leverage


Instrument	Fund Code	Risk Type
Municipal Bonds: Securities issued by a state or political subdivision to obtain funds for various public purposes. Municipal bonds include private activity bonds and industrial development bonds, as well as General Obligation Notes, Tax Anticipation Notes, Bond Anticipation Notes, Revenue Anticipation Notes, Project Notes, other short-term tax-exempt obligations, municipal leases, obligations of municipal housing authorities and single family revenue bonds.	1-4	Market Credit Political Tax Regulatory

New Financial Products: New options and futures contracts, and other financial products continue to be developed and the Funds may invest in such options, contracts and products.	1-5	Management Credit Market Liquidity

Preferred Stock: A class of stock that generally pays a dividend at a specified rate and has preference over common stock in the payment of dividends and in liquidation.	2-5	Market

Real Estate Investment Trusts (“REITs”): Pooled investment vehicles which invest primarily in income producing real estate or real estate related loans or interest.	2-5	Liquidity Management Market Regulatory Tax Prepayment

Repurchase Agreements: The purchase of a security and the simultaneous commitment to return the security to the seller at an agreed upon price on an agreed upon date. This is treated as a loan.	1-5	Credit Market Liquidity

Restricted Securities: Securities not registered under the Securities Act of 1933, such as privately placed commercial paper and Rule 144A securities.	1-5	Liquidity Market

Reverse Repurchase Agreements: The sale of a security and the simultaneous commitment to buy the security back at an agreed upon price on an agreed upon date. This is treated as a borrowing by a Fund.	1-5	Market Leverage

Securities Lending: The lending of up to 33 1/3% of a Fund’s total assets. In return, the Fund will receive cash, as collateral.	1-5	Credit Market Leverage

Short-Term Funding Agreements: Agreements issued by banks and highly rated U.S. insurance companies such as Guaranteed Investment Contracts (“GICs”) and Bank Investment Contracts (“BICs”).	1-4	Credit Liquidity Market

Stripped Mortgage-Backed Securities: Derivative multi-class mortgage securities usually structured with two classes of shares that receive different proportions of the interest and principal from a pool of mortgage backed obligations. These include IOs and POs.	1-4	Prepayment Market Credit Regulatory

Structured Instruments: Debt securities issued by agencies and instrumentalities of the U.S. government, banks, municipalities, corporations and other businesses whose interest and/or principal payments are indexed to foreign currency exchange rates, interest rates, or one or more other referenced indices.	1-4	Market Liquidity Management Credit Foreign Investment


Instrument	Fund Code	Risk Type
Swaps, Caps and Floors: A Fund may enter into these transactions to manage its exposure to changing interest rates and other factors. Swaps involve an exchange of obligations by two parties. Caps and floors entitle a purchaser to a principal amount from the seller of the cap or floor to the extent that a specified index exceeds or falls below a predetermined interest rate or amount.	1-5	Management Credit Liquidity Market

Time Deposits: Non-negotiable receipts issued by a bank in exchange for the deposit of funds.	1-5	Liquidity Credit Market

Treasury Receipts: TRs, TIGRs and CATS.	1-5	Market

U.S. Government Agency Securities: Securities issued by agencies and instrumentalities of the U.S. government. These include all types of securities issued by Ginnie Mae, Fannie Mae, and Freddie Mac including funding notes and subordinated benchmark notes.	1-5	Market Credit Govt. Securities

U.S. Treasury Obligations: Bills, notes, bonds, STRIPS and CUBES.	1-5	Market

Variable and Floating Rate Instruments: Obligations with interest rates which are reset daily, weekly, quarterly or some other period and which may be payable to the Fund on demand.	1-5	Credit Liquidity Market

Warrants and Rights: Securities, typically issued with preferred stock or bonds, that give the holder the right to buy a proportionate amount of common stock at a specified price.	5	Market Credit

When-Issued Securities and Forward Commitments: Purchase or contract to purchase securities at a fixed price for delivery at a future date.	1-5	Market Leverage Liquidity Credit

Zero Coupon Debt Securities: Bonds and other debt that pay no interest, but are issued at a discount from their value at maturity. When held to maturity, their entire return equals the difference between their issue price and their maturity value.	1-4	Credit Market Zero Coupon

Zero-Fixed-Coupon Debt Securities: Zero coupon debt securities which convert on a specified date to interest bearing debt securities.	1-4	Credit Market Zero Coupon

INVESTMENT RISKS

Below is a more complete discussion of the types of risks inherent in the securities and investment techniques listed above. Because of these risks, the value of the securities held by the Funds may fluctuate, as will the value of your investment in the Funds. Certain investments are more susceptible to these risks than others.

•

Credit Risk. The risk that the issuer of a security, or the counterparty to a contract, will default or otherwise become unable to honor a financial obligation. Credit risk is generally higher for non-investment grade securities. The price and liquidity of a security can be adversely affected prior to actual default as its credit status deteriorates and the probability of default rises.

•

Foreign Investment Risk. The risk associated with higher transaction costs, delayed settlements, currency controls and adverse economic developments. This also includes the risk that fluctuations in the exchange rates between the U.S. dollar and foreign currencies may negatively affect an investment. Adverse changes in exchange rates may erode or reverse any gains produced by foreign currency denominated investments and may widen any losses. Exchange rate volatility also may affect the ability of an issuer to repay U.S. dollar denominated debt, thereby increasing credit risk.

•

Government Securities Risk. The Funds may invest in securities issued or guaranteed by the U.S. government or its agencies or instrumentalities (such as Fannie Mae, Ginnie Mae or Freddie Mac securities). Although U.S. government securities issued directly by the U.S. government are guaranteed by the U.S. Treasury, other U.S. government securities issued by an agency or instrumentality of the U.S. government may not be. No assurance can be given that the U.S. government would provide financial support to its agencies and instrumentalities if not required to do so by law.

•

Leverage Risk. The risk associated with securities or practices that multiply small index or market movements into large changes in value. Leverage is often associated with investments in derivatives, but also may be embedded directly in the characteristics of other securities.

Hedged. When a derivative (a security whose value is based on another security or index) is used as a hedge against an opposite position that the Fund also holds, any loss generated by the derivative should be substantially offset by gains on the hedged investment, and vice versa. While hedging can reduce or eliminate losses, it can also reduce or eliminate gains. Hedges are sometimes subject to imperfect matching between the derivative and underlying security, and there can be no assurance that a Fund’s hedging transactions will be effective.

Speculative. To the extent that a derivative is not used as a hedge, the Fund is directly exposed to the risks of that derivative. Gains or losses from speculative positions in a derivative may be substantially greater than the derivative’s original cost.

•

Liquidity Risk. The risk that certain securities may be difficult or impossible to sell at the time and the price that normally prevails in the market. The seller may have to lower the price, sell other securities instead or forego an investment opportunity, any of which could have a negative effect on fund management or performance. This includes the risk of missing out on an investment opportunity because the assets necessary to take advantage of it are tied up in less advantageous investments.

•

Management Risk. The risk that a strategy used by a fund’s management may fail to produce the intended result. This includes the risk that changes in the value of a hedging instrument will not match those of the asset being hedged. Incomplete matching can result in unanticipated risks.

•

Market Risk. The risk that the market value of a security may move up and down, sometimes rapidly and unpredictably. These fluctuations may cause a security to be worth less than the price originally paid for it, or less than it was worth at an earlier time. Market risk may affect a single issuer, industry, sector of the economy or the

market as a whole. There is also the risk that the current interest rate may not accurately reflect existing market rates. For fixed income securities, market risk is largely, but not exclusively, influenced by changes in interest rates. A rise in interest rates typically causes a fall in values, while a fall in rates typically causes a rise in values. Finally, key information about a security or market may be inaccurate or unavailable. This is particularly relevant to investments in foreign securities.

•

Political Risk. The risk of losses attributable to unfavorable governmental or political actions, seizures of foreign deposits, changes in tax or trade statutes, and governmental collapse and war.

•

Prepayment Risk. The risk that the principal repayment of a security will occur at an unexpected time, especially that the repayment of a mortgage- or asset-backed security occurs either significantly sooner or later than expected. Changes in prepayment rates can result in greater price and yield volatility. Prepayments generally accelerate when interest rates decline. When mortgage and other obligations are prepaid, a Fund may have to reinvest in securities with a lower yield. Further, with early prepayment, a Fund may fail to recover additional amounts (i.e., premiums) paid for securities with higher interest rates, resulting in an unexpected capital loss.

•

Regulatory Risk. The risk associated with federal and state laws that may restrict the remedies that a lender has when a borrower defaults on loans. These laws include restrictions on foreclosures, redemption rights after foreclosure, federal and state bankruptcy and debtor relief laws, restrictions on “due on sale” clauses, and state usury laws.

•

Tax Risk. The risk that the issuer of the securities will fail to comply with certain requirements of the Internal Revenue Code, which could cause adverse tax consequences. Also, the risk that the tax treatment of municipal or other securities could be changed by Congress thereby affecting the value of outstanding securities.

•

Zero Coupon Risk. The market prices of securities structured as zero coupon or pay-in-kind securities are generally affected to a greater extent by interest rate changes. These securities tend to be more volatile than securities that pay interest periodically. This risk is similar to Credit Risk which is described above.

If you want more information about the Funds, the following documents are free upon request:

Annual/Semi-Annual Reports. Additional information about the Funds’ investments is available in the Funds’ annual and semi-annual reports to shareholders. In each Fund’s annual report, you will find a discussion of the market conditions and investment strategies that significantly affected the Fund’s performance during its last fiscal year.

Supplement. The Supplement provides more detailed information about the Funds and is incorporated into this Memorandum by reference.

How Can I Get More Information? You can get a free copy of the semi-annual/ annual reports or the Supplement, request other information or discuss your questions about the Funds by contacting your client relationship or client service manager or by writing the Funds at:

JPMorgan Institutional Trust

522 Fifth Avenue

New York, NY 10036

You can also review and copy the Funds’ reports and the Supplement at the Public Reference Room of the Securities and Exchange Commission (“SEC”) in Washington, D.C. (For information about the SEC’s Public Reference Room call 1-202-942-8090.) You can also get reports and other information about the Funds from the EDGAR Database on the SEC’s web site at http://www.sec.gov. Copies of this information may be obtained, after paying a copying charge, by electronic request at the following e-mail address: publicinfo@sec.gov or by writing the Public Reference Room of the SEC, Washington, D.C. 20549-0102.

The Investment Company Act File No. is 811-21638.

CONFIDENTIAL OFFERING MEMORANDUM SUPPLEMENT

JPMORGAN INSTITUTIONAL TRUST

JPMORGAN ULTRA SHORT-TERM BOND TRUST (THE “ULTRA SHORT-TERM BOND TRUST”)

JPMORGAN SHORT-TERM BOND TRUST (THE “SHORT-TERM BOND TRUST”)

JPMORGAN INTERMEDIATE BOND TRUST (THE “INTERMEDIATE BOND TRUST”)

JPMORGAN CORE BOND TRUST (THE “CORE BOND TRUST”)

JPMORGAN EQUITY INDEX TRUST (THE “EQUITY INDEX TRUST”)

(EACH A “FUND,” AND COLLECTIVELY THE “FUNDS”)

October 28, 2005

This Confidential Offering Memorandum Supplement (the “Supplement”) should be read in conjunction with the Confidential Offering Memorandum of JPMorgan Institutional Trust, dated October 28, 2005, as amended or supplemented from time to time. Each Fund issues its shares only in private placement transactions in accordance with Regulation D or other applicable exemptions under the Securities Act of 1933, as amended (the “Securities Act”). This Supplement is not an offer to sell, or a solicitation of any offer to buy, any security to the public within the meaning of the Securities Act.

Shares of the Funds may be purchased only by certain clients of J.P. Morgan Investment Management Inc. (“JPMIM”) and its affiliates who maintain one or more separately managed private accounts, and who are also “accredited investors,” as defined in Regulation D under the Securities Act. Eligible investors are institutional investors such as corporations, pension and profit sharing plans, financial institutions, endowments, and foundations. The Funds are not intended for individuals or accounts established for the benefit of individuals (other than certain pension and profit-sharing plans sponsored by employers or unions for the benefit of individual plan participants). Subscriptions may be accepted or rejected, in whole or in part, in the sole discretion of JPMIM. Shares of the Funds may also be purchased by certain investors outside of the United States consistent with applicable regulatory requirements.

Shares of the Funds are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under the Securities Act. Shares may be redeemed in accordance with the procedures set forth in the Confidential Offering Memorandum.

This Supplement is intended for use only by the person to whom it has been issued. Reproduction of this Supplement is prohibited.

In addition, there shall be no sale of the shares referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

TABLE OF CONTENTS


THE TRUST		4
INVESTMENT OBJECTIVES AND POLICIES		4
Additional Information on Fund Instruments		4
Asset-Backed Securities		4
Bank Obligations		4
Commercial Paper		5
Common Stock		5
Convertible Securities		5
Demand Features		6
Exchange Traded Funds		6
Foreign Investments		7
Risk Factors of Foreign Investments		7
FUTURES AND OPTIONS TRADING		8
Futures Contracts		8
Margin Requirements		8
U.S. Securities and Exchange Commissions Segregation Requirements		8
Liquidity Impact of Margin and SEC Segregation Requirements		9
Limits on Futures Contracts		9
Purpose of Utilizing Futures		9
Risk Factors in Futures Transactions		9
Options Contracts		10
Purchasing Call Options		11
Writing (Selling) Covered Call Options		11
Purchasing Put Options		12
Writing (Selling) Secured Puts		12
Engaging in Straddles and Spreads		12
Risk Factors in Options Transactions		12
Limitations on the Use of Options		13
Government Securities		13
Index Investing by the Equity Index Trust		14
Impact of Initial Public Offerings on Smaller Funds		15
Investment Company Securities		15
Loan Participations and Assignments		15
Mortgage-Related Securities		15
Limitations on the use of Mortgage-Backed Securities		17
Risks Factors of Mortgage-Related Securities		20
Municipal Securities		21
Risk Factors in Municpal Securities		23
Limitations on the Use of Municipal Securities		24
New Financial Products		25
PERCS*		25
Preferred Stock		25
Real Estate Investment Trusts (“REIT”)		25
Repurchase Agreements		26
Reverse Repurchase Agreements		26
Restricted Securities		27
Securities issued in connection with Reorganizations and Corporate Restructurings		28
Securities Lending		28
Short-Term Funding Agreements		28
Structured Instruments		28
Swaps, Caps and Floors		29
Treasury Receipts		30
U.S. Treasury Obligations		31
Variable and Floating Rate Instruments		31
Warrants		31
When-Issued Securities and Forward Commitments		32
INVESTMENT RESTRICTIONS		32
FUNDAMENTAL POLICIES		32
NON-FUNDAMENTAL POLICIES		33


Temporary Defensive Positions		33
Portfolio Turnover		34
TAX INFORMATION		34
Additional Tax Information Concerning all Funds		34
VALUATION		37
Valuation of the Funds		37
ADDITIONAL INFORMATION REGARDING THE CALCULATION OF PER SHARE NET ASSET VALUE		38
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION		38
Purchases-in-Kind		38
Redemptions in-Kind		39
Redemptions		39
Cut-Off Times for Purchase and Redemption Orders		39
MANAGEMENT OF THE TRUST		39
TRUSTEES		39
OFFICERS		42
BOARD REVIEW OF INVESTMENT ADVISORY ARRANGEMENTS		45
THE ADVISER		46
CODES OF ETHICS		50
Portfolio Transactions		50
Administrator		52
Placement Agent		53
Custodian, Transfer Agent, Accounting Agent and Dividend Disbursing Agent		54
Securities Lending Agent		54
ADDITIONAL INFORMATION		55
Proxy Voting Policies and Procedures		55
Description of Shares		56
Shareholder and Trustee Liability		56
Portfolio Holdings Disclosure		57
Miscellaneous		58
Financial Statements		61
APPENDIX A—DESCRIPTION OF RATINGS		A-1

THE TRUST

JPMorgan Institutional Trust is an open-end management investment company. The Trust was formed as a Delaware statutory trust on September 14, 2004. The Trust consists of five series of units of beneficial interest (“SHARES”) each representing interests in one of the following separate investment portfolios (each a “FUND” and collectively, the “FUNDS”):

Equity Fund: The JPMorgan Equity Index Trust (this Fund is referred to as the “EQUITY FUND”).

Bond Funds: The JPMorgan Intermediate Bond Trust, the JPMorgan Ultra Short-Term Bond Trust, the JPMorgan Short-Term Bond Trust and the JPMorgan Core Bond Trust (these four Funds being collectively referred to as the “BOND FUNDS”).

INVESTMENT OBJECTIVES AND POLICIES

The following policies supplement each Fund’s investment objective and policies as set forth in the Confidential Offering Memorandum. The Funds are advised by J.P. Morgan Investment Management Inc. (“JPMIM” or the “ADVISER”).

Additional Information on Fund Instruments

Asset-Backed Securities

Asset-backed securities consist of securities secured by company receivables, home equity loans, truck and auto loans, leases, or credit card receivables. Asset-backed securities also include other securities backed by other types of receivables or other assets. These securities are generally pass-through securities, which means that principal and interest payments on the underlying securities (less servicing fees) are passed through to shareholders on a pro rata basis.

Prepayment Risks. The issuers of asset-backed securities may be able to repay principal in advance if interest rates fall. Also, the underlying assets (for example, the underlying credit card debt) may be refinanced or paid off prior to maturity during periods of declining interest rates. If asset-backed securities are pre-paid, a Fund may have to reinvest the proceeds from the securities at a lower rate. In addition, potential market gains on a security subject to prepayment risk may be more limited than potential market gains on a comparable security that is not subject to prepayment risk. Under certain prepayment rate scenarios, a Fund may fail to recover additional amounts paid (i.e., premiums) for securities with higher interest rates, resulting in an unexpected loss.

Bank Obligations

Bank obligations consist of bankers’ acceptances, certificates of deposit, and time deposits.

Bankers’ acceptances are negotiable drafts or bills of exchange typically drawn by an importer or exporter to pay for specific merchandise, which are “accepted” by a bank, meaning, in effect, that the bank unconditionally agrees to pay the face value of the instrument on maturity. To be eligible for purchase by a Fund, a bankers’ acceptance must be guaranteed by a domestic or foreign bank or savings and loan association having, at the time of investment, total assets in excess of $1 billion (as of the date of its most recently published financial statements).

Certificates of deposit are negotiable certificates issued against funds deposited in a commercial bank or a savings and loan association for a definite period of time and earning a specified return. To be eligible for purchase by a Fund, a certificate of deposit must be issued by (i) a domestic or foreign branch of a U.S. commercial bank which is a member of the Federal Reserve System or the deposits of which are insured by the Federal Deposit Insurance Corporation, or (ii) a domestic savings and loan association, the deposits of which are insured by the Federal Deposit Insurance Corporation provided that, in each case, at the time of purchase, such institution has total assets in excess of $1 billion (as of the date of their most recently published financial statements). Certificates of deposit may also include those issued by foreign banks outside the United States with total assets at the time of purchase in excess of the equivalent of $1 billion.

Some of the Funds may also invest in Eurodollar certificates of deposit, which are U.S. dollar-denominated certificates of deposit issued by branches of foreign and domestic banks located outside the United States. The Funds may also invest in yankee certificates of deposit, which are certificates of deposit issued by a U.S. branch of a foreign bank denominated in U.S. dollars and held in the United States. Certain Funds may also invest in obligations (including banker’s acceptances and certificates of deposit) denominated in foreign currencies (see “Foreign Investments” herein).

Time deposits are interest-bearing non-negotiable deposits at a bank or a savings and loan association that have a specific maturity date. A time deposit earns a specific rate of interest over a definite period of time. Time deposits cannot be traded on the secondary market and those exceeding seven days and with a withdrawal penalty are considered to be illiquid. Time deposits will be maintained only at banks or savings and loan associations from which a Fund could purchase certificates of deposit. All of the Funds may utilize demand deposits in connection with their day-to-day operations.

Commercial Paper

Commercial paper consists of promissory notes issued by corporations. Although such notes are generally unsecured, the Funds may also purchase secured commercial paper. In the event of a default of an issuer of secured commercial paper, a Fund may hold the securities and other investments that were pledged as collateral even if it does not invest in such securities or investments. In such a case, the Fund would take steps to dispose of such securities or investments in a commercially reasonable manner. Except as noted below with respect to variable amount master demand notes, issues of commercial paper normally have maturities of less than nine months and fixed rates of return. The Funds only purchase commercial paper that meets the following criteria:

Bond Funds. The Bond Funds may purchase commercial paper consisting of issues rated at the time of purchase in the highest or second highest rating category by at least one Nationally Recognized Statistical Rating Organization (“NRSRO”) (such as A-2 or better by Standard & Poor’s Rating Service (“S&P Rating Service”), Prime-2 or better by Moody’s Investors Service, Inc. (“MOODY’S”), F2 or better by Fitch Ratings (“FITCH”), or R-2 or better by Dominion Bond Rating Service Limited (“Dominion”)) or if unrated, determined by JPMIM to be of comparable quality.

Equity Fund. The Equity Fund may purchase commercial paper consisting of issues rated at the time of purchase in the highest or second highest rating category by at least one NRSRO (such as A-2 or better by S&P Rating Service, Prime-2 or better by Moody’s, F-2 or better by Fitch or R-2 or better by Dominion) or if unrated, determined by JPMIM to be of comparable quality.

Some of the above Funds may also invest in Canadian commercial paper, which is commercial paper issued by a Canadian corporation or a Canadian counterpart of a U.S. corporation, and in Europaper which is U.S. dollar denominated commercial paper of a foreign issuer. See “Risk Factors of Foreign Investments” below.

Common Stock

Common stock represents a share of ownership in a company and usually carries voting rights and earns dividends. Unlike preferred stock, dividends on common stock are not fixed but are declared at the discretion of the issuer’s board of directors.

Convertible Securities

Convertible securities are similar to both fixed income and equity securities. Convertible securities may be issued as bonds or preferred stock. Because of the conversion feature, the market value of convertible securities tends to move together with the market value of the underlying stock. As a result, the Funds base their selection of convertible securities, to a great extent, on the potential for capital appreciation that may exist in the underlying stock. The value of convertible securities is also affected by prevailing interest rates, the credit quality of the issuer, and any call provisions. In some cases, the issuer may cause a convertible security to convert to common stock. In

other situations, it may be advantageous for a Fund to cause the conversion of convertible securities to common stock. If a convertible security converts to common stock, a Fund may hold such common stock in its portfolio even if it does not invest in common stock.

Demand Features

Some of the Funds may acquire securities that are subject to puts and standby commitments (“DEMAND FEATURES”) to purchase the securities at their principal amount (usually with accrued interest) within a fixed period (usually seven days) following a demand by the Fund. The Demand Feature may be issued by the issuer of the underlying securities, a dealer in the securities or by another third party, and may not be transferred separately from the underlying security. The underlying securities subject to a put may be sold at any time at market rates. The Funds expect that they will acquire puts only where the puts are available without the payment of any direct or indirect consideration. However, if advisable or necessary, a premium may be paid for put features. A premium paid will have the effect of reducing the yield otherwise payable on the underlying security.

Under a “STAND-BY COMMITMENT,” a dealer would agree to purchase, at a Fund’s option, specified securities at a specified price. A Fund will acquire these commitments solely to facilitate portfolio liquidity and does not intend to exercise its rights thereunder for trading purposes. Stand-by commitments may also be referred to as put options. A Fund will generally limit its investments in stand-by commitments to 25% of its total assets.

The purpose of engaging in transactions involving puts is to maintain flexibility and liquidity to permit the Fund to meet redemption requests and remain as fully invested as possible.

Exchange Traded Funds (“ETFs”)

Some of the Funds may invest in ETFs. ETFs are ownership interests in unit investment trusts, depositary receipts, and other pooled investment vehicles that hold a portfolio of securities or stocks designed to track the price performance and dividend yield of a particular broad based, sector or international index. Broad based ETFs typically track a broad group of stocks from different industries and market sectors. For example, iShares S&P 500 Index Fund and Standard and Poor’s Depositary Receipts are ETFs that track the S&P 500. Sector ETFs track companies represented in related industries within a sector of the economy. For example, iShares Dow Jones U.S. Healthcare Sector Index Fund is a sector ETF that tracks the Dow Jones Healthcare sector. International ETFs track a group of stocks from a specific country. For example, iShares MSCI-Australia tracks the Morgan Stanley Capital International Index for Australia Stocks.

ETFs also may hold a portfolio of debt securities. For example, iShares Lehman 1-3 Year Treasury Bond Fund invests in a portfolio of publicly issued, U.S. Treasury securities designed to track the Lehman Brothers 1-3 Year Treasury Index. Similarly, iShares GS $ Investor Corporate Bond Fund is designed to track a segment of the U.S. investment grade corporate bond market as defined by the GS $ Investop Index.

ETFs invest in a securities portfolio that includes substantially all of the securities (in substantially the same weights) as the securities included in the designated index. ETFs are traded on an exchange, and, in some cases may not be redeemed. The results of ETFs will not match the performance of the designated index due to reductions in the performance attributable to transaction and other expenses, including fees paid by the ETF to service providers. ETFs are subject to risks specific to the performance of a few component securities if such securities represent a highly concentrated weighting in the designated index. ETFs are eligible to receive their portion of dividends, if any, accumulated on the securities held in trust, less fees and expenses of the trust.

The investment vehicles issuing ETFs are not actively managed. Rather, the investment vehicle’s objective is to track the performance of a specified index. Therefore, securities may be purchased, retained and sold at times when an actively managed trust would not do so. As a result, you can expect greater risk of loss (and a correspondingly greater prospect of gain) from changes in the value of securities that are heavily weighted in the index than would be the case if the investment vehicle was not fully invested in such securities.

Select sector ETFs and other types of ETFs continue to be developed. As new products are developed, the Funds may invest in them to the extent consistent with the Fund’s investment objective, policies and restrictions.

A Fund generally will limit its investments in any one issue of ETFs to 5% of the Fund’s total assets and 3% of the outstanding voting securities of the ETF issue. Moreover, a Fund’s investments in all ETFs generally will not exceed 10% of the Fund’s total assets, when aggregated with all other investments in investment companies.

Foreign Investments

Some of the Funds may invest in certain obligations or securities of foreign issuers. Possible investments include equity securities and debt securities (e.g., bonds and commercial paper) of foreign entities, obligations of foreign branches of U.S. banks and of foreign banks, including, without limitation, Eurodollar Certificates of Deposit, Eurodollar Time Deposits, Eurodollar Bankers’ Acceptances, Canadian Time Deposits and Yankee Certificates of Deposit, and investments in Canadian Commercial Paper, and Europaper. Securities of foreign issuers may include sponsored and unsponsored American Depositary Receipts (“ADRs”), European Depositary Receipts (“EDRs”), and Global Depositary Receipts (“GDRs”). Sponsored ADRs are listed on the New York Stock Exchange; unsponsored ADRs are not. Therefore, there may be less information available about the issuers of unsponsored ADRs than the issuers of sponsored ADRs. Unsponsored ADRs are restricted securities. EDRs and GDRs are not listed on the New York Stock Exchange. As a result, it may be difficult to obtain information about EDRs and GDRs.

Risk Factors of Foreign Investments

Political and Exchange Risks. Foreign investments may subject a Fund to investment risks that differ in some respects from those related to investments in obligations of U.S. domestic issuers. Such risks include future adverse political and economic developments, the possible imposition of withholding taxes on interest or other income, possible seizure, nationalization or expropriation of foreign deposits, the possible establishment of exchange controls or taxation at the source, greater fluctuations in value due to changes in exchange rates, or the adoption of other foreign governmental restrictions which might adversely affect the payment of principal and interest on such obligations.

Higher Transaction Costs. Foreign investments may entail higher custodial fees and sales commissions than domestic investments.

Accounting and Regulatory Differences. Foreign issuers of securities or obligations are often subject to accounting treatment, and engage in business practices, different from those of domestic issuers of similar securities or obligations. Foreign branches of U.S. banks and foreign banks are not regulated by U.S. banking authorities and may be subject to less stringent reserve requirements than those applicable to domestic branches of U.S. banks. In addition, foreign banks generally are not bound by the accounting, auditing, and financial reporting standards comparable to those applicable to U.S. banks.

Currency Risk. Foreign securities are typically denominated in foreign currencies. The value of a Fund’s investments denominated in foreign currencies and any funds held in foreign currencies will be affected by:

•

Changes in currency exchange rates;

•

The relative strength of those currencies and the U.S. dollar; and

•

Exchange control regulations.

Changes in the foreign currency exchange rates also may affect the value of dividends and interest earned, gains and losses realized on the sale of securities and net investment income and gains, if any, to be distributed to Shareholders by a Fund. The exchange rates between the U.S. dollar and other currencies are determined by the forces of supply and demand in foreign exchange markets.

Limitations on the Use of Foreign Investments. Investments in all types of foreign obligations or securities will not exceed 25% of the net assets of the Core Bond Trust and the Short-Term Bond Trust.

FUTURES AND OPTIONS TRADING

The Funds may enter into futures contracts, options, options on futures contracts and stock index futures contracts and options thereon for the purposes of remaining fully invested, reducing transaction costs, or managing interest rate risk.

Futures Contracts

Futures contracts provide for the future sale by one party and purchase by another party of a specified amount of a specific security, class of securities, or the value of an index at a specified future time and at a specified price. Futures contracts may be issued with respect to fixed-income securities, foreign currencies, single stocks or financial indices, including indices of U.S. government securities, foreign government securities, equity or fixed-income securities. U.S. futures contracts are traded on exchanges which have been designated “contract markets” by the CFTC and must be executed through a futures commission merchant (“FCM”), or brokerage firm, which is a member of the relevant contract market. Through their clearing corporations, the exchanges guarantee performance of the contracts as between the clearing members of the exchange. The Funds invest in futures contracts only to the extent they could invest in the underlying instrument directly.

Margin Requirements

The buyer or seller of a futures contract is not required to deliver or pay for the underlying instrument unless the contract is held until the delivery date. However, both the buyer and seller are required to deposit “initial margin” for the benefit of the FCM when the contract is entered into. Initial margin deposits:

•

are equal to a percentage of the contract’s value, as set by the exchange on which the contract is traded;

•

may be maintained in cash or certain other liquid assets by the Funds’ custodian for the benefit of the FCM; and

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are similar to good faith deposits or performance bonds.

Unlike margin extended by a securities broker, initial margin payments do not constitute purchasing securities on margin for purposes of the Fund’s investment limitations. If the value of either party’s position declines, that party will be required to make additional “variation margin” payments for the benefit of the FCM to settle the change in value on a daily basis. The party that has a gain may be entitled to receive all or a portion of this amount. In the event of the bankruptcy of the FCM that holds margin on behalf of a Fund, that Fund may be entitled to return of margin owed to such Fund only in proportion to the amount received by the FCM’s other customers. The Trust will attempt to minimize this risk by careful monitoring of the creditworthiness of the FCMs with which they do business and by depositing margin payments in a segregated account with the Trust’s custodian.

U.S. Securities and Exchange Commission’s Segregation Requirements

In addition to the margin restrictions discussed above, transactions in futures contracts may involve the segregation of funds pursuant to requirements imposed by the U.S. Securities and Exchange Commission (“SEC”). Under those requirements, where a Fund has a long position in a futures contract, it may be required to establish a segregated account containing cash or certain liquid assets equal to the purchase price of the contract (less any margin on deposit). However, segregation of assets is not required if a Fund “covers” a long position. For a short position in futures or forward contracts held by a Fund, those requirements may mandate the establishment of a segregated account with cash or certain liquid assets that, when added to the amounts deposited as margin, equal the market value of the instruments underlying the futures contracts (but are not less than the price at which the short positions were established).

Liquidity Impact of Margin and SEC Segregation Requirements

Although a Fund will segregate cash and liquid assets in an amount sufficient to cover its open futures obligations, the segregated assets will be available to that Fund immediately upon closing out the futures position, while settlement of securities transactions could take several days. However, because a Fund’s cash that may otherwise be invested would be held uninvested or invested in other liquid assets so long as the futures position remains open, such Fund’s return could be diminished due to the opportunity losses of foregoing other potential investments.

Limits on Futures Contracts

The Funds intend to comply with guidelines of eligibility for exclusion from the definition of the term “commodity pool operator” adopted by the CFTC and the National Futures Association, which regulate trading in the futures markets. In addition, the Equity Fund will not enter into futures contracts to the extent that the value of the futures contracts held would exceed 25% of the Fund’s total assets.

Purpose of Utilizing Futures

A Fund’s primary purpose in entering into futures contracts is to protect that Fund from fluctuations in the value of securities or interest rates without actually buying or selling the underlying debt or equity security. For example, if the Fund anticipates an increase in the price of stocks, and it intends to purchase stocks at a later time, that Fund could enter into a futures contract to purchase a stock index as a temporary substitute for stock purchases. If an increase in the market occurs that influences the stock index as anticipated, the value of the futures contracts will increase, thereby serving as a hedge against the fund not participating in a market advance. This technique is sometimes known as an anticipatory hedge. Conversely, if a Fund holds stocks and seeks to protect itself from a decrease in stock prices, the Fund might sell stock index futures contracts, thereby hoping to offset the potential decline in the value of its portfolio securities by a corresponding increase in the value of the futures contract position. A Fund could protect against a decline in stock prices by selling portfolio securities and investing in money market instruments, but the use of futures contracts enables it to maintain a defensive position without having to sell portfolio securities.

If a Fund owns Treasury bonds and the portfolio manager expects interest rates to increase, that Fund may take a short position in interest rate futures contracts. Taking such a position would have much the same effect as that Fund selling Treasury bonds in its portfolio. If interest rates increase as anticipated, the value of the Treasury bonds would decline, but the value of that Fund’s interest rate futures contract will increase, thereby keeping the net asset value of that Fund from declining as much as it may have otherwise. If, on the other hand, a portfolio manager expects interest rates to decline, that Fund may take a long position in interest rate futures contracts in anticipation of later closing out the futures position and purchasing the bonds. Although a Fund can accomplish similar results by buying securities with long maturities and selling securities with short maturities, given the greater liquidity of the futures market than the cash market, it may be possible to accomplish the same result more easily and more quickly by using futures contracts as an investment tool to reduce risk.

Risk Factors in Futures Transactions

Liquidity. Because futures contracts are generally settled within a day from the date they are closed out, compared with a settlement period of three days for some types of securities, the futures markets can provide superior liquidity to the securities markets. Nevertheless, there is no assurance that a liquid secondary market will exist for any particular futures contract at any particular time. In addition, futures exchanges may establish daily price fluctuation limits for futures contracts and may halt trading if a contract’s price moves upward or downward more than the limit in a given day. On volatile trading days when the price fluctuation limit is reached, it may be impossible for a Fund to enter into new positions or close out existing positions. If the secondary market for a futures contract is not liquid because of price fluctuation limits or otherwise, a Fund may not be able to promptly liquidate unfavorable futures positions and potentially could be required to continue to hold a futures position until the delivery date, regardless of changes in its value. As a result, such Fund’s access to other assets held to cover its futures positions also could be impaired.

Risk of Loss. Futures contracts entail risks. Although the Funds believe that the use of such contracts will benefit the Funds, a Fund’s overall performance could be worse than if such Fund had not entered into futures contracts if the Adviser’s investment judgment proves incorrect. For example, if a Fund has hedged against the effects of a possible decrease in prices of securities held in its portfolio and prices increase instead, that Fund will lose part or all of the benefit of the increased value of these securities because of offsetting losses in its futures positions. In addition, if a Fund has insufficient cash, it may have to sell securities from its portfolio to meet daily variation margin requirements. Those sales may be, but will not necessarily be, at increased prices which reflect the rising market and may occur at a time when the sales are disadvantageous to such Fund.

The risk of loss in trading futures contracts in some strategies can be substantial, due both to the low margin deposits required, and the extremely high degree of leverage involved in futures pricing. Because the deposit requirements in the futures markets are less onerous than margin requirements in the securities market, there may be increased participation by speculators in the futures market which may also cause temporary price distortions. A relatively small price movement in a futures contract may result in immediate and substantial loss (as well as gain) to the investor. For example, if at the time of purchase, 10% of the value of the futures contract is deposited as margin, a subsequent 10% decrease in the value of the futures contract would result in a total loss of the margin deposit, before any deduction for the transaction costs, if the account were then closed out. Thus, a purchase or sale of a futures contract may result in losses in excess of the amount invested in the contract. The Funds will only engage in futures transactions when it is believed these risks are justified and will engage in futures transactions primarily for risk management purposes.

Correlation Risk. The prices of futures contracts depend primarily on the value of their underlying instruments. Because there are a limited number of types of futures contracts, it is possible that the standardized futures contracts available to a Fund will not match exactly such Fund’s current or potential investments. A Fund may buy and sell futures contracts based on underlying instruments with different characteristics from the securities in which it typically invests—for example, by hedging investments in portfolio securities with a futures contract based on a broad index of securities—which involves a risk that the futures position will not correlate precisely with the performance of such Fund’s investments.

Futures prices can also diverge from the prices of their underlying instruments, even if the underlying instruments closely correlate with a Fund’s investments. Futures prices are affected by factors such as current and anticipated short-term interest rates, changes in volatility of the underlying instruments and the time remaining until expiration of the contract. Those factors may affect securities prices differently from futures prices. Imperfect correlations between a Fund’s investments and its futures positions also may result from differing levels of demand in the futures markets and the securities markets, from structural differences in how futures and securities are traded, and from imposition of daily price fluctuation limits for futures contracts. A Fund may buy or sell futures contracts with a greater or lesser value than the securities it wishes to hedge or is considering purchasing in order to attempt to compensate for differences in historical volatility between the futures contract and the securities, although this may not be successful in all cases. If price changes in a Fund’s futures positions are poorly correlated with its other investments, its futures positions may fail to produce desired gains or result in losses that are not offset by the gains in that Fund’s other investments.

Options Contracts

Some of the Funds may use options on securities or futures contracts to reduce investment risk. An option gives the buyer of the option the right (but not the obligation) to purchase a futures contract or security at a specified price (the “strike price”). The purchase price of an option is referred to as its “premium.” Options have limited life spans, usually tied to the delivery or settlement date of the underlying futures contract or security. If an option is not exercised prior to its expiration, it becomes worthless. This means the buyer has lost the premium paid, while the seller (the “writer”) has received a premium without being required to perform. Increased market volatility and relatively longer remaining life spans generally increase the value of options by increasing the probability of market swings favorable to the holder and unfavorable to the writer during the life of the option.

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A CALL OPTION gives the buyer the right to purchase a security at a specified price (the “exercise price”) at any time until a certain date. So long as the obligation of the writer of a call

option continues, the writer may be required to deliver the underlying security against payment of the exercise price. This obligation terminates upon the expiration of the call option, or such earlier time at which the writer closes the transaction by purchasing an option identical to that previously sold. To secure the writer’s obligation under a call option, a writer is required to deposit in escrow the underlying security or other assets in accordance with the rules of the Options Clearing Corporation. A call option is “in-the-money” if the strike price is below current market levels and “out-of-the-money” if the strike price is above current market level.

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A PUT OPTION gives the buyer the right to sell the underlying futures contract or security. The writer of a put option must purchase futures contracts or securities at a strike price if the option is exercised. A put option is “in-the-money” if the strike price is above current market levels and “out-of-the-money” if the strike price is below current market levels.

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A COVERED OPTION is an option written by a party who owns the underlying position.

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AN OPENING TRANSACTION is the initial purchase or sale of an option.

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A CLOSING TRANSACTION is a transaction which effectively ends an option writer’s financial exposure to an existing option obligation. A closing transaction involves entering into an option contract that has the reverse effect of that being closed out. Such an option will be on the same security with the same exercise price and expiration date as the option contract originally opened. The premium which a Fund will pay in executing a closing purchase transaction may be higher (or lower) than the premium received when the option was written, depending in large part upon the relative price of the underlying security at the time of each transaction. Closing transactions will be effected in order to realize a profit on an outstanding call option, to prevent an underlying security from being called, or to permit the sale of the underlying security.

Purchasing Call Options

Certain Funds may purchase call options to hedge against an increase in the price of securities that the Fund wants ultimately to buy. Such hedge protection is provided during the life of the call option since the Fund, as holder of the call option, is able to buy the underlying security at the exercise price regardless of any increase in the underlying security’s market price. In order for a call option to be profitable, the market price of the underlying security must rise sufficiently above the exercise price to cover the premium and transaction costs. These costs will reduce any profit the Fund might have realized had it bought the underlying security at the time it purchased the call option.

Writing (Selling) Covered Call Options

Some of the Funds may write covered call options and purchase options to close out options previously written by the Fund. A Fund’s purpose in writing covered call options is to generate additional premium income. This premium income will serve to enhance a Fund’s total return and will reduce the effect of any price decline of the security involved in the option. Generally, the Funds will write covered call options on securities which, in the opinion of the Adviser, are not expected to make any major price moves in the near future but which, over the long term, are deemed to be attractive investments for the Fund. The Funds will write only covered call options. This means that a Fund will only write a call option on a security which a Fund already owns.

Fund securities on which call options may be written will be purchased solely on the basis of investment considerations consistent with each Fund’s investment objectives. The writing of covered call options is a conservative investment technique believed to involve relatively little risk (in contrast to the writing of naked options, which a Fund will not do), but capable of enhancing the Fund’s total return. When writing a covered call option, a Fund, in return for the premium, gives up the opportunity for profit from a price increase in the underlying security above the exercise price, but retains the risk of loss should the price of the security decline.

The security covering the call will be maintained in a segregated account with the Fund’s custodian. Unlike one who owns a security not subject to an option, a Fund has no control over when it may be required to sell the

underlying security, since it may be assigned an exercise notice at any time prior to the expiration of its obligation as a writer. Thus, the security could be “called away” at a price substantially below the fair market value of the security. Additionally, when a security is called away, the Fund’s turnover rate will increase, which would cause a Fund to incur additional brokerage expenses. If a call option which a Fund has written expires, a Fund will realize a gain in the amount of the premium; however, such gain may be offset by a decline in the market value of the underlying security during the option period. If the call option is exercised, a Fund will realize a gain or loss from the sale of the underlying security.

The Funds do not consider a security covered by a call to be “pledged” as that term is used in each Fund’s policy which limits the pledging of its assets. Call options written by a Fund will normally have expiration dates of less than nine months from the date written.

The premium received is the market value of an option. In determining whether a particular call option should be written, the Adviser will consider the reasonableness of the anticipated premium and the likelihood that a liquid secondary market will exist for those options.

From time to time, a Fund may purchase an underlying security for delivery in accordance with an exercise notice of a call option assigned to it, rather than delivering such security from its portfolio. In such cases, additional costs will be incurred.

A Fund will realize a profit or loss from a closing purchase transaction if the cost of the transaction is less or more than the premium received from the writing of the option. Because increases in the market price of a call option will generally reflect increases in the market price of the underlying security, any loss resulting from a closing transaction on a call option is likely to be offset in whole or in part by appreciation of the underlying security owned by the Fund.

Purchasing Put Options

Certain Funds may also purchase put options to protect their portfolio holdings in an underlying security against a decline in market value. Such hedge protection is provided during the life of the put option since the Fund, as holder of the put option, is able to sell the underlying security at the put exercise price regardless of any decline in the underlying security’s market price. For a put option to be profitable, the market price of the underlying security must decline sufficiently below the exercise price to cover the premium and transaction costs. By using put options in this manner, the Fund will reduce any profit it might otherwise have realized from appreciation of the underlying security by the premium paid for the put option and by the transaction cost.

Writing (Selling) Secured Puts

Certain Funds may write secured puts. For the secured put writer, substantial depreciation in the value of the underlying security would result in the security being “put to” the writer at the strike price of the option which may be substantially in excess of the fair market value of the security. If a secured put option expires unexercised, the writer realizes a gain in the amount of the premium.

Engaging in Straddles and Spreads

Certain Funds also may engage in straddles and spreads. In a straddle transaction, a Fund either buys a call and a put or sells a call and a put on the same security. In a spread, a Fund purchases and sells a call or a put. The Fund will sell a straddle when JPMIM believes the price of a security will be stable. The Fund will receive a premium on the sale of the put and the call. A spread permits the Fund to make a hedged investment that the price of a security will increase or decline.

Risk Factors in Options Transactions

Risk of Loss in Purchasing Transactions. When a Fund purchases an option, it runs the risk of losing its entire investment in the option in a relatively short period of time, unless the Fund exercises the option or enters into a closing sale transaction with respect to the option during the life of the option. If the price of the underlying security does not rise (in the case of a call) or fall (in the case of a put) to an extent sufficient

to cover the option premium and transaction costs, a Fund will lose part or all of its investment in the option. This contrasts with an investment by a Fund in the underlying securities, since the Fund may continue to hold its investment in those securities notwithstanding the lack of a change in price of those securities. In addition, there may be imperfect or no correlation between the changes in market value of the securities held by the Funds and the prices of the options.

Risk of Loss in Writing (Selling) Options. When it writes a covered call option, a Fund runs the risk that it will be forced to sell a security it owns at below its market value or, alternatively, incur a loss in otherwise extinguishing its obligation under the covered call option. When it writes a secured put option, a Fund runs the risk that it will be required to buy a security at above its market price or, alternatively, incur a loss in otherwise extinguishing its obligation under the secured put option.

Judgment of Adviser. The successful use of the options strategies depends on the ability of the Adviser to assess interest rate and market movements correctly and to accurately calculate the fair price of the option. The effective use of options also depends on a Fund’s ability to terminate option positions at times when the Adviser deems it desirable to do so. A Fund will take an option position only if the Adviser believes there is a liquid secondary market for the option, however, there is no assurance that a Fund will be able to effect closing transactions at any particular time or at an acceptable price.

Liquidity. If a secondary trading market in options were to become unavailable, a Fund could no longer engage in closing transactions. Lack of investor interest might adversely affect the liquidity of the market for particular options or series of options. A marketplace may discontinue trading of a particular option or options generally. In addition, a market could become temporarily unavailable if unusual events, such as volume in excess of trading or clearing capability, were to interrupt normal market operations. A lack of liquidity may limit a Fund’s ability to realize its profits or limit its losses.

Market Restrictions. Disruptions in the markets for the securities underlying options purchased or sold by a Fund could result in losses on the options. If trading is interrupted in an underlying security, the trading of options on that security is normally halted as well. As a result, a Fund as purchaser or writer of an option will be unable to close out its positions until option trading resumes, and it may be faced with losses if trading in the security reopens at a substantially different price. In addition, the Options Clearing Corporation (“OCC”) or other options markets may impose exercise restrictions. If a prohibition on exercise is imposed at the time when trading in the option has also been halted, a Fund as purchaser or writer of an option will be locked into its position until one of the two restrictions has been lifted. If a prohibition on exercise remains in effect until an option owned by a Fund has expired, the Fund could lose the entire value of its option.

Foreign Investment Risks. Special risks are presented by internationally-traded options. Because of time differences between the United States and the various foreign countries, and because different holidays are observed in different countries, foreign option markets may be open for trading during hours or on days when U.S. markets are closed. As a result, option premiums may not reflect the current prices of the underlying interest in the United States.

Limitations on the Use of Options

Each Fund will limit the writing of put and call options to 25% of its net assets. Some Funds may enter into over-the-counter option transactions. There will be an active over-the-counter market for such options which will establish their pricing and liquidity. Broker-dealers with whom the Trust will enter into such option transactions shall have a minimum net worth of $20,000,000.

Government Securities

Securities issued by U.S. government agencies or instrumentalities may not be guaranteed by the U.S. Treasury. No assurance can be given that the U.S. government would provide financial support to U.S. government-sponsored agencies or instrumentalities if it is not obligated to do so by law. A Fund will invest in the obligations of such agencies or instrumentalities only when JPMIM believes the credit risk presented by the obligations is determined to be minimal.

Obligations of certain agencies and instrumentalities, such as the Government National Mortgage Association (“Ginnie Mae”) and the Export-Import Bank, are supported by the full faith and credit of the U.S. Treasury; others, such as the Federal National Mortgage Association (“Fannie Mae”), are supported by the right of the issuer to borrow from the Treasury; and still others, such as the Federal Farm Credit Banks and the Federal Home Loan Mortgage Corporation (“Freddie Mac”), are supported only by the credit of the instrumentality.

The Bond Funds may invest in all types of securities issued by Ginnie Mae, Fannie Mae and Freddie Mac, including without limitation funding notes and subordinated benchmark notes. For example, the Bond Funds may invest in Fannie Mae’s Subordinated Benchmark Notes^® (“Fannie Mae Subordinated Notes”). The Bond Funds generally will only purchase Fannie Mae Subordinated Notes rated in one of the three highest categories or, if unrated, determined to be of comparable quality by JPMIM. Fannie Mae Subordinated Notes will be unsecured and subordinated and will rank junior in priority to all existing and future liabilities of Fannie Mae, other than those liabilities that by their terms expressly rank junior to Fannie Mae Subordinated Notes. If capital ratios fall below certain levels, Fannie Mae will cease paying (but not accruing) interest until such capital ratios are restored. Like other securities issued by Fannie Mae, Fannie Mae Subordinated Notes are not guaranteed by the U.S. government. For information on mortgage-related securities issued by certain agencies or instrumentalities of the U.S. government, see “Investment Objective and Policies—Mortgage-Related Securities” in this Supplement.

Index Investing by the Equity Index Trust

Equity Index Trust. The Equity Index Trust attempts to track the performance of the S&P 500 Index (the “INDEX”) to achieve a correlation between the performance of the Fund and that of the Index of at least 0.95, without taking into account expenses. A correlation of 1.00 would indicate perfect correlation, which would be achieved when the Fund’s net asset value, including the value of its dividend and capital gains distributions, increases or decreases in exact proportion to changes in the Index. The Fund’s ability to correlate its performance with the Index, however, may be affected by, among other things, changes in securities markets, the manner in which the Index is calculated by Standard & Poor’s Corporation (“S&P”) and the timing of purchases and redemptions. In the future, the Trustees of the Trust, subject to the approval of Shareholders, may select another index if such a standard of comparison is deemed to be more representative of the performance of common stocks.

S&P chooses the stocks to be included in the Index largely on a statistical basis. Inclusion of a stock in the Index in no way implies an opinion by S&P as to its attractiveness as an investment. The Index is determined, composed and calculated by S&P without regard to the Equity Index Trust. S&P is neither a sponsor of, nor in any way affiliated with the Equity Index Trust, and S&P makes no representation or warranty, expressed or implied on the advisability of investing in the Equity Index Trust or as to the ability of the Index to track general stock market performance, and S&P disclaims all warranties of merchantability or fitness for a particular purpose or use with respect to the Index or any data included in the Index. “S&P 500” is a service mark of S&P.

The weights of stocks in the Index are based on each stock’s relative total market value, i.e., market price per share times the number of Shares outstanding. Because of this weighting, approximately 50% of the Index is currently composed of the 50 largest companies in the Index, and the Index currently represents over 65% of the market value of all U.S. common stocks listed on the New York Stock Exchange. Typically, companies included in the Index are the largest and most dominant firms in their respective industries.

JPMIM generally selects stocks for the Equity Index Trust in the order of their weights in the Index beginning with the heaviest weighted stocks. The percentage of the Equity Index Trust’s assets to be invested in each stock is approximately the same as the percentage it represents in the Index. No attempt is made to manage the Equity Index Trust in the traditional sense using economic, financial and market analysis. The Equity Index Trust is managed using a computer program to determine which stocks are to be purchased and sold to replicate the Index to the extent feasible. From time to time, administrative adjustments may be made in the Fund because of changes in the composition of the Index, but such changes should be infrequent.

Impact of Initial Public Offerings on Smaller Funds

Initial public offerings (“IPOs”) and other investment techniques may have a magnified performance impact on a Fund with a small asset base. A smaller Fund may not experience similar performance as its assets grow.

Investment Company Securities

Some of the Funds may invest up to 5% of their total assets in the securities of any one investment company, but may not own more than 3% of the outstanding voting stock of any one investment company or invest more than 10% of their total assets in the securities of other investment companies. These limits do not apply to the Funds to the extent permitted by the order or rule issued by the SEC or as permitted by the 1940 Act. Other investment company securities may include securities of money market funds for which JPMIM or its affiliate serves as investment Adviser or administrator. Because other investment companies employ an investment adviser, such investments by the Funds may cause Shareholders to bear duplicate fees. JPMIM will waive its fee attributable to the assets of the investing fund invested in funds advised by JPMIM.

Loan Participations and Assignments

Some of the Funds may invest in fixed and floating rate loans (“Loans”). Loans are typically arranged through private negotiations between borrowers (which may be corporate issuers or issuers of sovereign debt obligations) and one or more financial institutions (“Lenders”). Generally, the Funds invest in Loans by purchasing Loan Participations (“Participations”) or assignments of all or a portion of Loans (“Assignments”) from third parties.

Typically, a Fund will have a contractual relationship only with the Lender and not with the borrower when it purchases a Participation. In contrast, a Fund has direct rights against the borrower on the Loan when it purchases an Assignment. Because Assignments are arranged through private negotiations between potential assignees and potential assignors, however, the rights and obligations acquired by a Fund as the purchaser of an Assignment may differ from, and be more limited than, those held by the assigning Lender.

Limitations on Investments in Loan Participations and Assignments. Loan participations and assignments may be illiquid. As a result, a Fund will invest no more than 15% of its net assets in these investments. If a government entity is a borrower on a Loan, the Fund will consider the government to be the issuer of a Participation or Assignment for purposes of a Fund’s fundamental investment policy that it will not invest 25% or more of its total assets in securities of issuers conducting their principal business activities in the same industry (i.e., foreign government).

Risk Factors of Loan Participations and Assignments. A Fund may have difficulty disposing of Assignments and Participations because to do so it will have to assign such securities to a third party. Because there is no liquid market for such securities, the Funds anticipate that such securities could be sold only to a limited number of institutional investors. The lack of a liquid secondary market may have an adverse impact on the value of such securities and a Fund’s ability to dispose of particular Assignments or Participations when necessary to meet a Fund’s liquidity needs in response to a specific economic event such as a deterioration in the creditworthiness of the borrower. The lack of a liquid secondary market for Assignments and Participations also may make it more difficult for a Fund to assign a value to those securities when valuing the Fund’s securities and calculating its net asset value.

Mortgage-Related Securities

Mortgage-Backed Securities (CMOs and REMICs). Mortgage-backed securities include collateralized mortgage obligations (“CMOs”) and Real Estate Mortgage Investment Conduits (“REMICs”). (A REMIC is a CMO that qualifies for special tax treatment under the Internal Revenue Code of 1986, as amended (the “Code”) and invests in certain mortgages principally secured by interests in real property and other permitted investments).

Mortgage-backed securities represent pools of mortgage loans assembled for sale to investors by:

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various governmental agencies such as Ginnie Mae;

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government-related organizations such as Fannie Mae and Freddie Mac; and

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non-governmental issuers such as commercial banks, savings and loan institutions, mortgage bankers, and private mortgage insurance companies. (Non-governmental mortgage securities cannot be treated as U.S. government securities for purposes of investment policies).

There are a number of important differences among the agencies and instrumentalities of the U.S. government that issue mortgage-related securities and among the securities that they issue.

Ginnie Mae Securities. Mortgage-related securities issued by Ginnie Mae include Ginnie Mae Mortgage Pass-Through Certificates which are guaranteed as to the timely payment of principal and interest by Ginnie Mae. Ginnie Mae’s guarantee is backed by the full faith and credit of the United States. Ginnie Mae is a wholly-owned U.S. government corporation within the Department of Housing and Urban Development. Ginnie Mae certificates also are supported by the authority of Ginnie Mae to borrow funds from the U.S. Treasury to make payments under its guarantee.

Fannie Mae Securities. Mortgage-related securities issued by Fannie Mae include Fannie Mae Guaranteed Mortgage Pass-Through Certificates which are solely the obligations of Fannie Mae and are not backed by or entitled to the full faith and credit of the United States. Fannie Mae is a government-sponsored organization owned entirely by private stockholders. Fannie Mae Certificates are guaranteed as to timely payment of the principal and interest by Fannie Mae.

Freddie Mac Securities. Mortgage-related securities issued by Freddie Mac include Freddie Mac Mortgage Participation Certificates. Freddie Mac is a corporate instrumentality of the United States, created pursuant to an Act of Congress, which is owned entirely by private stockholders. Freddie Mac Certificates are not guaranteed by the United States or by any Federal Home Loan Bank and do not constitute a debt or obligation of the United States or of any Federal Home Loan Bank. Freddie Mac Certificates entitle the holder to timely payment of interest, which is guaranteed by Freddie Mac. Freddie Mac guarantees either ultimate collection or timely payment of all principal payments on the underlying mortgage loans. When Freddie Mac does not guarantee timely payment of principal, Freddie Mac may remit the amount due on account of its guarantee of ultimate payment of principal at any time after default on an underlying mortgage, but in no event later than one year after it becomes payable.

CMOs and guaranteed REMIC pass-through certificates (“REMIC CERTIFICATES”) issued by Fannie Mae, Freddie Mac, Ginnie Mae and private issuers are types of multiple class pass-through securities. Investors may purchase beneficial interests in REMICs, which are known as “regular” interests or “residual” interests. The Funds do not currently intend to purchase residual interests in REMICs. The REMIC Certificates represent beneficial ownership interests in a REMIC Trust, generally consisting of mortgage loans or Fannie Mae, Freddie Mac or Ginnie Mae guaranteed mortgage pass-through certificates (the “MORTGAGE ASSETS”). The obligations of Fannie Mae, Freddie Mac or Ginnie Mae under their respective guaranty of the REMIC Certificates are obligations solely of Fannie Mae, Freddie Mac or Ginnie Mae, respectively.

Fannie Mae REMIC Certificates. Fannie Mae REMIC Certificates are issued and guaranteed as to timely distribution of principal and interest by Fannie Mae. In addition, Fannie Mae will be obligated to distribute the principal balance of each class of REMIC Certificates in full, whether or not sufficient funds are otherwise available.

Freddie Mac REMIC Certificates. Freddie Mac guarantees the timely payment of interest, and also guarantees the payment of principal as payments are required to be made on the underlying mortgage participation certificates (“PCs”). PCs represent undivided interests in specified residential mortgages or participation therein purchased by Freddie Mac and placed in a PC pool. With respect to principal payments on PCs, Freddie Mac generally guarantees ultimate collection of all principal of the related mortgage loans without offset or deduction. Freddie Mac also guarantees timely payment of principal on certain PCs referred to as “Gold PCs.”

Ginnie Mae REMIC Certificates. Ginnie Mae guarantees the full and timely payment of interest and principal on each class of securities (in accordance with the terms of those classes as specified in the related offering circular supplement). The Ginnie Mae guarantee is backed by the full faith and credit of the United States of America.

REMIC Certificates issued by Fannie Mae, Freddie Mac and Ginnie Mae are treated as U.S. Government securities for purposes of investment policies.

CMOs and REMIC Certificates provide for the redistribution of cash flow to multiple classes. Each class of CMOs or REMIC Certificates, often referred to as a “tranche,” is issued at a specific adjustable or fixed interest rate and must be fully retired no later than its final distribution date. This reallocation of interest and principal results in the redistribution of prepayment risk across different classes. This allows for the creation of bonds with more or less risk than the underlying collateral exhibits. Principal prepayments on the mortgage loans or the Mortgage Assets underlying the CMOs or REMIC Certificates may cause some or all of the classes of CMOs or REMIC Certificates to be retired substantially earlier than their final distribution dates. Generally, interest is paid or accrues on all classes of CMOs or REMIC Certificates on a monthly basis.

The principal of and interest on the Mortgage Assets may be allocated among the several classes of CMOs or REMIC Certificates in various ways. In certain structures (known as “sequential pay” CMOs or REMIC Certificates), payments of principal, including any principal prepayments, on the Mortgage Assets generally are applied to the classes of CMOs or REMIC Certificates in the order of their respective final distribution dates. Thus, no payment of principal will be made on any class of sequential pay CMOs or REMIC Certificates until all other classes having an earlier final distribution date have been paid in full.

Additional structures of CMOs and REMIC Certificates include, among others, principal only structures, interest only structures, inverse floaters and “parallel pay” CMOs and REMIC Certificates. Certain of these structures may be more volatile than other types of CMO and REMIC structures. Parallel pay CMOs or REMIC Certificates are those which are structured to apply principal payments and prepayments of the Mortgage Assets to two or more classes concurrently on a proportionate or disproportionate basis. These simultaneous payments are taken into account in calculating the final distribution date of each class.

A wide variety of REMIC Certificates may be issued in the parallel pay or sequential pay structures. These securities include accrual certificates (also known as “Z-BONDS”), which only accrue interest at a specified rate until all other certificates having an earlier final distribution date have been retired and are converted thereafter to an interest-paying security, and planned amortization class (“PAC”) certificates, which are parallel pay REMIC Certificates which generally require that specified amounts of principal be applied on each payment date to one or more classes of REMIC Certificates (the “PAC CERTIFICATES”), even though all other principal payments and prepayments of the Mortgage Assets are then required to be applied to one or more other classes of the certificates. The scheduled principal payments for the PAC Certificates generally have the highest priority on each payment date after interest due has been paid to all classes entitled to receive interest currently. Shortfalls, if any, are added to the amount of principal payable on the next payment date. The PAC Certificate payment schedule is taken into account in calculating the final distribution date of each class of PAC. In order to create PAC tranches, one or more tranches generally must be created that absorb most of the volatility in the underlying Mortgage Assets. These tranches tend to have market prices and yields that are much more volatile than the PAC classes. The Z-Bonds in which the Funds may invest may bear the same non-credit-related risks as do other types of Z-Bonds. Z-Bonds in which the Fund may invest will not include residual interest.

Limitations on the use of Mortgage-Backed Securities

Bond Funds. The Bond Funds invest in mortgage-backed securities may invest in mortgage-backed securities issued by private issuers including Guaranteed CMOs and REMIC pass-through securities. The Bond Funds may also invest in mortgage-backed securities that are rated in one of the four highest rating categories by at least one NRSRO at the time of investment or, if unrated, determined by JPMIM to be of comparable quality.

Mortgage Dollar Rolls. Some of the Funds may enter into Mortgage Dollar Rolls in which the Funds sell securities for delivery in the current month and simultaneously contract with the same counterparty to

repurchase similar (same type, coupon and maturity) but not identical securities on a specified future date. When a Fund enters into mortgage dollar rolls, the Fund will hold and maintain a segregated account until the settlement date. The segregated account will contain cash or liquid securities in an amount equal to the forward purchase price. The Funds benefit to the extent of:

•

any difference between the price received for the securities sold and the lower forward price for the future purchase (often referred to as the “drop”); or

•

fee income plus the interest earned on the cash proceeds of the securities sold until the settlement date of the forward purchase.

Unless such benefits exceed the income, capital appreciation or gains on the securities sold as part of the mortgage dollar roll, the investment performance of a Fund will be less than what the performance would have been without the use of mortgage dollar rolls. The benefits of mortgage dollar rolls may depend upon JPMIM’s ability to predict mortgage prepayments and interest rates. There is no assurance that mortgage dollar rolls can be successfully employed. The Funds currently intend to enter into mortgage dollar rolls that are accounted for as a financing transaction. For purposes of diversification and investment limitations, mortgage dollar rolls are considered to be mortgage-backed securities.

Stripped Mortgage-Backed Securities. Stripped Mortgage-Backed Securities (“SMBS”) are derivative multi-class mortgage securities issued outside the REMIC or CMO structure. SMBS are usually structured with two classes that receive different proportions of the interest and principal distributions from a pool of mortgage assets. A common type of SMBS will have one class receiving all of the interest from the mortgage assets (“IOs”), while the other class will receive all of the principal (“POs”). Mortgage IOs receive monthly interest payments based upon a notional amount that declines over time as a result of the normal monthly amortization and unscheduled prepayments of principal on the associated mortgage POs.

In addition to the risks applicable to Mortgage-Related Securities in general, SMBS are subject to the following additional risks:

Prepayment/Interest Rate Sensitivity. SMBS are extremely sensitive to changes in prepayments and interest rates. Even though these securities have been guaranteed by an agency or instrumentality of the U.S. government, under certain interest rate or prepayment rate scenarios, the Funds may lose money on investments in SMBS.

Interest Only SMBS. Changes in prepayment rates can cause the return on investment in IOs to be highly volatile. Under extremely high prepayment conditions, IOs can incur significant losses.

Principal Only SMBS. POs are bought at a discount to the ultimate principal repayment value. The rate of return on a PO will vary with prepayments, rising as prepayments increase and falling as prepayments decrease. Generally, the market value of these securities is unusually volatile in response to changes in interest rates.

Yield Characteristics. Although SMBS may yield more than other mortgage-backed securities, their cash flow patterns are more volatile and there is a greater risk that any premium paid will not be fully recouped. JPMIM will seek to manage these risks (and potential benefits) by investing in a variety of such securities and by using certain analytical and hedging techniques.

The Bond Funds may invest in SMBS to enhance revenues or hedge against interest rate risk. The Funds invest in SMBS issued or guaranteed by the U.S. government, its agencies or instrumentalities (“Agency SMBS”). To the extent that Non Agency SMBS are issued, the Funds may buy them to the extent such investment is consistent with the applicable Fund’s investment objective, strategies and policies.

Adjustable Rate Mortgage Loans. The Bond Funds may invest in adjustable rate mortgage loans (“ARMs”). ARMs eligible for inclusion in a mortgage pool will generally provide for a fixed initial mortgage interest rate for a specified period of time. Thereafter, the interest rates (the “MORTGAGE INTEREST RATES”) may be subject to periodic adjustment based on changes in the applicable index rate (the “INDEX RATE”). The adjusted rate would be equal to the Index Rate plus a gross margin, which is a fixed percentage spread over the Index Rate established for each ARM at the time of its origination.

Adjustable interest rates can cause payment increases that some borrowers may find difficult to make. However, certain ARMs may provide that the Mortgage Interest Rate may not be adjusted to a rate above an applicable lifetime maximum rate or below an applicable lifetime minimum rate for such ARM. Certain ARMs may also be subject to limitations on the maximum amount by which the Mortgage Interest Rate may adjust for any single adjustment period (the “MAXIMUM ADJUSTMENT”). Other ARMs (“NEGATIVELY AMORTIZING ARMs”) may provide instead or as well for limitations on changes in the monthly payment on such ARMs. Limitations on monthly payments can result in monthly payments which are greater or less than the amount necessary to amortize a Negatively Amortizing ARM by its maturity at the Mortgage Interest Rate in effect in any particular month. In the event that a monthly payment is not sufficient to pay the interest accruing on a Negatively Amortizing ARM, any such excess interest is added to the principal balance of the loan, causing negative amortization and will be repaid through future monthly payments. It may take borrowers under Negatively Amortizing ARMs longer periods of time to achieve equity and may increase the likelihood of default by such borrowers. In the event that a monthly payment exceeds the sum of the interest accrued at the applicable Mortgage Interest Rate and the principal payment which would have been necessary to amortize the outstanding principal balance over the remaining term of the loan, the excess (or “accelerated amortization”) further reduces the principal balance of the ARM. Negatively Amortizing ARMs do not provide for the extension of their original maturity to accommodate changes in their Mortgage Interest Rate. As a result, unless there is a periodic recalculation of the payment amount (which there generally is), the final payment may be substantially larger than the other payments. These limitations on periodic increases in interest rates and on changes in monthly payment protect borrowers from unlimited interest rate and payment increases.

Certain adjustable rate mortgage loans may provide for periodic adjustments of scheduled payments in order to amortize fully the mortgage loan by its stated maturity. Other adjustable rate mortgage loans may permit their stated maturity to be extended or shortened in accordance with the portion of each payment that is applied to interest as affected by the periodic interest rate adjustments.

There are two main categories of indices which provide the basis for rate adjustments on ARMs: those based on U.S. Treasury securities and those derived from a calculated measure such as a cost of funds index or a moving average of mortgage rates. Commonly utilized indices include the one-year, three-year and five-year constant maturity Treasury bill rates, the three-month Treasury bill rate, the 180-day Treasury bill rate, rates on longer-term Treasury securities, the 11th District Federal Home Loan Bank Cost of Funds, the National Median Cost of Funds, the one-month, three-month, six-month or one-year London Interbank Offered Rate (“LIBOR”), the prime rate of a specific bank, or commercial paper rates. Some indices, such as the one-year constant maturity Treasury rate, closely mirror changes in market interest rate levels. Others, such as the 11th District Federal Home Loan Bank Cost of Funds index, tend to lag behind changes in market rate levels and tend to be somewhat less volatile. The degree of volatility in the market value of the Fund’s portfolio and therefore in the net asset value of the Fund’s shares will be a function of the length of the interest rate reset periods and the degree of volatility in the applicable indices.

In general, changes in both prepayment rates and interest rates will change the yield on Mortgage-Backed Securities. The rate of principal prepayments with respect to ARMs has fluctuated in recent years. As is the case with fixed mortgage loans, ARMs may be subject to a greater rate of principal prepayments in a declining interest rate environment. For example, if prevailing interest rates fall significantly, ARMs could be subject to higher prepayment rates than if prevailing interest rates remain constant because the availability of fixed rate mortgage loans at competitive interest rates may encourage mortgagors to refinance their ARMs to “lock-in” a lower fixed interest rate. Conversely, if prevailing interest rates rise significantly, ARMs may prepay at lower rates than if prevailing rates remain at or below those in effect at the time such ARMs were originated. As with fixed rate mortgages, there can be no certainty as to the rate of prepayments on the ARMs in either stable or changing interest rate environments. In addition, there can be no certainty as to whether increases in the principal balances of the ARMs due to the addition of deferred interest may result in a default rate higher than that on ARMs that do not provide for negative amortization.

Other factors affecting prepayment of ARMs include changes in mortgagors’ housing needs, job transfers, unemployment, mortgagors’ net equity in the mortgage properties and servicing decisions.

Risk Factors of Mortgage-Related Securities

Guarantor Risk. There can be no assurance that the U.S. government would provide financial support to Fannie Mae or Freddie Mac if necessary in the future. Although certain mortgage-related securities are guaranteed by a third party or otherwise similarly secured, the market value of the security, which may fluctuate, is not so secured.

Interest Rate Sensitivity. If a Fund purchases a mortgage-related security at a premium, that portion may be lost if there is a decline in the market value of the security whether resulting from changes in interest rates or prepayments in the underlying mortgage collateral. As with other interest-bearing securities, the prices of such securities are inversely affected by changes in interest rates. However, though the value of a mortgage-related security may decline when interest rates rise, the converse is not necessarily true since in periods of declining interest rates the mortgages underlying the securities are prone to prepayment. For this and other reasons, a mortgage-related security’s stated maturity may be shortened by unscheduled prepayments on the underlying mortgages and, therefore, it is not possible to predict accurately the security’s return to the Funds. In addition, regular payments received in respect of mortgage-related securities include both interest and principal. No assurance can be given as to the return the Funds will receive when these amounts are reinvested.

Market Value. The market value of the Fund’s adjustable rate Mortgage-Backed Securities may be adversely affected if interest rates increase faster than the rates of interest payable on such securities or by the adjustable rate mortgage loans underlying such securities. Furthermore, adjustable rate Mortgage-Backed Securities or the mortgage loans underlying such securities may contain provisions limiting the amount by which rates may be adjusted upward and downward and may limit the amount by which monthly payments may be increased or decreased to accommodate upward and downward adjustments in interest rates.

Prepayments. Adjustable rate Mortgage-Backed Securities have less potential for capital appreciation than fixed rate Mortgage-Backed Securities because their coupon rates will decline in response to market interest rate declines. The market value of fixed rate Mortgage-Backed Securities may be adversely affected as a result of increases in interest rates and, because of the risk of unscheduled principal prepayments, may benefit less than other fixed rate securities of similar maturity from declining interest rates. Finally, to the extent Mortgage-Backed Securities are purchased at a premium, mortgage foreclosures and unscheduled principal prepayments may result in some loss of the Fund’s principal investment to the extent of the premium paid. On the other hand, if such securities are purchased at a discount, both a scheduled payment of principal and an unscheduled prepayment of principal will increase current and total returns and will accelerate the recognition of income.

Yield Characteristics. The yield characteristics of Mortgage-Backed Securities differ from those of traditional fixed income securities. The major differences typically include more frequent interest and principal payments, usually monthly, and the possibility that prepayments of principal may be made at any time. Prepayment rates are influenced by changes in current interest rates and a variety of economic, geographic, social and other factors and cannot be predicted with certainty. As with fixed rate mortgage loans, adjustable rate mortgage loans may be subject to a greater prepayment rate in a declining interest rate environment. The yields to maturity of the Mortgage-Backed Securities in which the Funds invest will be affected by the actual rate of payment (including prepayments) of principal of the underlying mortgage loans. The mortgage loans underlying such securities generally may be prepaid at any time without penalty. In a fluctuating interest rate environment, a predominant factor affecting the prepayment rate on a pool of mortgage loans is the difference between the interest rates on the mortgage loans and prevailing mortgage loan interest rates (giving consideration to the cost of any refinancing). In general, if mortgage loan interest rates fall sufficiently below the interest rates on fixed rate mortgage loans underlying mortgage pass-through securities, the rate of prepayment would be expected to increase. Conversely, if mortgage loan interest rates rise above the interest rates on the fixed rate mortgage loans underlying the mortgage pass-through securities, the rate of prepayment may be expected to decrease.

Municipal Securities

Municipal Securities are issued to obtain funds for various public purposes, including the construction of a wide range of public facilities such as:

bridges,

highways,

roads,

schools,

waterworks and sewer systems, and

other utilities.

Other public purposes for which Municipal Securities may be issued include:

refunding outstanding obligations,

obtaining funds for general operating expenses, and

obtaining funds to lend to other public institutions and facilities.

In addition, certain debt obligations known as “PRIVATE ACTIVITY BONDS” may be issued by or on behalf of municipalities and public authorities to obtain funds to provide:

water, sewage and solid waste facilities,

qualified residential rental projects,

certain local electric, gas and other heating or cooling facilities,

qualified hazardous waste facilities,

high-speed intercity rail facilities,

governmentally-owned airports, docks and wharves and mass transportation facilities,

qualified mortgages,

student loan and redevelopment bonds, and

bonds used for certain organizations exempt from Federal income taxation.

Certain debt obligations known as “INDUSTRIAL DEVELOPMENT BONDS” under prior Federal tax law may have been issued by or on behalf of public authorities to obtain funds to provide:

privately operated housing facilities,

sports facilities,

industrial parks,

convention or trade show facilities,

airport, mass transit, port or parking facilities,

air or water pollution control facilities,

sewage or solid waste disposal facilities, and

facilities for water supply.

Other private activity bonds and industrial development bonds issued to fund the construction, improvement, equipment or repair of privately-operated industrial, distribution, research, or commercial facilities may also be Municipal Securities, but the size of such issues is limited under current and prior Federal tax law. The aggregate amount of most private activity bonds and industrial development bonds is limited (except in the case of certain types of facilities) under federal tax law by an annual “volume cap.” The volume cap limits the annual aggregate principal amount of such obligations issued by or on behalf of all governmental instrumentalities in the state.

The two principal classifications of Municipal Securities consist of “general obligation” and “limited” (or revenue) issues. General obligation bonds are obligations involving the credit of an issuer possessing taxing power and are payable from the issuer’s general unrestricted revenues and not from any particular fund or source. The characteristics and method of enforcement of general obligation bonds vary according to the law applicable to the particular issuer, and payment may be dependent upon appropriation by the issuer’s legislative body. Limited obligation bonds are payable only from the revenues derived from a particular facility or class of facilities or, in some cases, from the proceeds of a special excise or other specific revenue source. Private activity bonds and industrial development bonds generally are revenue bonds and thus not payable from the unrestricted revenues of the issuer. The credit and quality of such bonds is generally related to the credit of the bank selected to provide the letter of credit underlying the bond. Payment of principal of and interest on industrial development revenue bonds is the responsibility of the corporate user (and any guarantor).

The Funds may also acquire “moral obligation” issues, which are normally issued by special purpose authorities, and in other tax-exempt investments including pollution control bonds and tax-exempt commercial paper. Each Fund that may purchase municipal bonds may purchase:

Short-term tax-exempt General Obligations Notes,

Tax Anticipation Notes,

Bond Anticipation Notes,

Revenue Anticipation Notes,

Project Notes, and

Other forms of short-term tax-exempt loans.

Such notes are issued with a short-term maturity in anticipation of the receipt of tax funds, the proceeds of bond placements, or other revenues. Project Notes are issued by a state or local housing agency and are sold by the Department of Housing and Urban Development. While the issuing agency has the primary obligation with respect to its Project Notes, they are also secured by the full faith and credit of the United States through agreements with the issuing authority which provide that, if required, the Federal government will lend the issuer an amount equal to the principal of and interest on the Project Notes.

There are, of course, variations in the quality of Municipal Securities, both within a particular classification and between classifications. Also, the yields on Municipal Securities depend upon a variety of factors, including:

•

general money market conditions,

•

coupon rate,

•

the financial condition of the issuer,

•

general conditions of the municipal bond market,

•

the size of a particular offering,

•

the maturity of the obligations, and

•

the rating of the issue.

The ratings of Moody’s and S&P represent their opinions as to the quality of Municipal Securities. However, ratings are general and are not absolute standards of quality. Municipal Securities with the same maturity, interest rate and rating may have different yields while Municipal Securities of the same maturity and interest rate with different ratings may have the same yield. Subsequent to its purchase by a Fund, an issue of Municipal Securities may cease to be rated or its rating may be reduced below the minimum rating required for purchase by the Fund. JPMIM will consider such an event in determining whether the Fund should continue to hold the obligations.

Municipal Securities may include obligations of municipal housing authorities and single-family mortgage revenue bonds. Weaknesses in Federal housing subsidy programs and their administration may result in a decrease of subsidies available for payment of principal and interest on housing authority bonds. Economic developments, including fluctuations in interest rates and increasing construction and operating costs, may also adversely impact revenues of housing authorities. In the case of some housing authorities, inability to obtain additional financing could also reduce revenues available to pay existing obligations.

Single-family mortgage revenue bonds are subject to extraordinary mandatory redemption at par in whole or in part from the proceeds derived from prepayments of underlying mortgage loans and also from the unused proceeds of the issue within a stated period which may be within a year from the date of issue.

Municipal leases are obligations issued by state and local governments or authorities to finance the acquisition of equipment and facilities. Municipal leases may be considered to be illiquid. They may take the form of a lease, an installment purchase contract, a conditional sales contract, or a participation interest in any of the above. The Board of Trustees is responsible for determining the credit quality of unrated municipal leases, on an ongoing basis, including an assessment of the likelihood that the lease will not be canceled.

Risk Factors in Municipal Securities

Tax Risk. The Internal Revenue Code of 1986, as amended (the “Code”), imposes certain continuing requirements on issuers of tax-exempt bonds regarding the use, expenditure and investment of bond proceeds and the payment of rebates to the United States of America. Failure by the issuer to comply subsequent to the issuance of tax-exempt bonds with certain of these requirements could cause interest on the bonds to become includable in gross income retroactive to the date of issuance.

Housing Authority Tax Risk. The exclusion from gross income for Federal income tax purposes for certain housing authority bonds depends on qualification under relevant provisions of the Code and on other provisions of Federal law. These provisions of Federal law contain requirements relating to the cost and location of the residences financed with the proceeds of the single-family mortgage bonds and the income levels of tenants of the rental projects financed with the proceeds of the multi-family housing bonds. Typically, the issuers of the bonds, and other parties, including the originators and servicers of the single-family mortgages and the owners of the rental projects financed with the multi-family housing bonds, covenant to meet these requirements. However, there is no assurance that the requirements will be met. If such requirements are not met:

•

the interest on the bonds may become taxable, possibly retroactively from the date of issuance;

•

the value of the bonds may be reduced;

•

you and other Shareholders may be subject to unanticipated tax liabilities;

•

a Fund may be required to sell the bonds at the reduced value;

•

it may be an event of default under the applicable mortgage;

•

the holder may be permitted to accelerate payment of the bond; and

•

the issuer may be required to redeem the bond.

In addition, if the mortgage securing the bonds is insured by the Federal Housing Administration (“FHA”), the consent of the FHA may be required before insurance proceeds would become payable.

Information Risk. Information about the financial condition of issuers of Municipal Securities may be less available than about corporations having a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Securities Exchange Act”).

State and Federal Laws. An issuer’s obligations under its Municipal Securities are subject to the provisions of bankruptcy, insolvency, and other laws affecting the rights and remedies of creditors. These laws may extend the time for payment of principal or interest, or restrict the Fund’s ability to collect payments due on Municipal Securities. In addition, recent amendments to some statutes governing security interests (e.g., Revised Article 9 of the Uniform Commercial Code) change the way in which security interests and liens securing Municipal Securities are perfected. These amendments may have an adverse impact on existing Municipal Securities (particularly issues of Municipal Securities that do not have a corporate trustee who is responsible for filing UCC financing statements to continue the security interest or lien).

Litigation and Current Developments. Litigation or other conditions may materially adversely affect the power or ability of an issuer to meet its obligations for the payment of interest on and principal of its Municipal Securities. Such litigation or conditions may from time to time have the effect of introducing uncertainties in the market for tax-exempt obligations, or may materially affect the credit risk with respect to particular bonds or notes. Adverse economic, business, legal or political developments might affect all or a substantial portion of a Fund’s Municipal Securities in the same manner.

New Legislation. From time to time, proposals have been introduced before Congress for the purpose of restricting or eliminating the federal income tax exemption for interest on tax exempt bonds, and similar proposals may be introduced in the future. The Supreme Court has held that Congress has the constitutional authority to enact such legislation. It is not possible to determine what effect the adoption of such proposals could have on (i) the availability of Municipal Securities for investment by the Funds, and (ii) the value of the investment portfolios of the Funds.

Limitations on the Use of Municipal Securities

The Funds may invest in Municipal Securities if JPMIM determines that such Municipal Securities offer attractive yields. The Funds may invest in Municipal Securities either by purchasing them directly or by purchasing certificates of accrual or similar instruments evidencing direct ownership of interest payments or principal payments, or both, on Municipal Securities, provided that, in the opinion of counsel to the initial seller of each such certificate or instrument, any discount accruing on such certificate or instrument that is purchased at a yield not greater than the coupon rate of interest on the related Municipal Securities will to the same extent as interest on such Municipal Securities be exempt from federal income tax and state income tax (where applicable) and not treated as a preference item for individuals for purposes of the federal alternative minimum tax.

The Funds may also invest in Municipal Securities by purchasing from banks participation interests in all or part of specific holdings of Municipal Securities. Such participation may be backed in whole or in part by an irrevocable letter of credit or guarantee of the selling bank. The selling bank may receive a fee from a Fund in connection with the arrangement. A Fund will not purchase participation interests unless it receives an opinion of counsel or a ruling of the Internal Revenue Service that interest earned by it on Municipal Securities in which it holds such participation interest is exempt from federal income tax and state income tax (where applicable) and not treated as a preference item for individuals for purposes of the federal alternative minimum tax. Each Fund will limit its investment in municipal leases to no more than 5% of its total assets.

New Financial Products

New options and futures contracts and other financial products, and various combinations of options and futures contracts continue to be developed. These various products may be used to adjust the risk and return characteristics of each Fund’s investments. These various products may increase or decrease exposure to security prices, interest rates, commodity prices, or other factors that affect security values, regardless of the issuer’s credit risk. If market conditions do not perform consistently with expectations, the performance of each Fund would be less favorable than it would have been if these products were not used. In addition, losses may occur if counterparties involved in transactions do not perform as promised. These products may expose the Fund to potentially greater return as well as potentially greater risk of loss than more traditional fixed income investments.

PERCS*

The Equity Fund may invest in Preferred Equity Redemption Cumulative Stock (“PERCS”), which is a form of convertible preferred stock that actually has more of an equity component than it does fixed income characteristics. These instruments permit companies to raise capital via a surrogate for common equity. PERCS are preferred stock which convert to common stock after a specified period of time, usually three years, and are considered the equivalent of equity by the ratings agencies. Issuers pay holders a substantially higher dividend yield than that on the underlying common, and in exchange, the holder’s appreciation is capped, usually at about 30 percent. PERCS are callable at any time. The PERC is mandatorily convertible into common stock, but is callable at any time at an initial call price that reflects a substantial premium to the stock’s issue price. PERCS offer a higher dividend than that available on the common stock, but in exchange the investors agree to the company placing a cap on the potential price appreciation. The call price declines daily in an amount that reflects the incremental dividend that holders enjoy. PERCS are listed on an exchange where the common stock is listed.

*PERCS is a registered trademark of Morgan Stanley, which does not sponsor and is in no way affiliated with the Trust.

Preferred Stock

Preferred stock is a class of stock that generally pays dividends at a specified rate and has preference over common stock in the payment of dividends and liquidation. Preferred stock generally does not carry voting rights. As with all equity securities, the price of preferred stock fluctuates based on changes in a company’s financial condition and on overall market and economic conditions.

Real Estate Investment Trusts (“REITs”)

Certain of the Funds may invest in equity interests or debt obligations issued by REITs. REITs are pooled investment vehicles which invest primarily in income producing real estate or real estate related loans or interest. REITs are generally classified as equity REITs, mortgage REITs or a combination of equity and mortgage REITs. Equity REITs invest the majority of their assets directly in real property and derive income primarily from the collection of rents. Equity REITs can also realize capital gains by selling property that has appreciated in value. Mortgage REITs invest the majority of their assets in real estate mortgages and derive income from the collection of interest payments. Similar to investment companies, REITs are not taxed on income distributed to shareholders provided they comply with several requirements of the Code. A Fund will indirectly bear its proportionate share of expenses incurred by REITs in which a Fund invests in addition to the expenses incurred directly by a Fund.

Investing in REITs involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. Equity REITs may be affected by changes in the value of the underlying property owned by the REITs, while mortgage REITs may be affected by the quality of any credit extended. REITs are dependent upon management skills, are not diversified, are subject to heavy cash flow dependency, default by borrowers and self-liquidation. REITs are also subject to the possibilities of failing to qualify for tax free pass-through of income under the Code and failing to maintain their exemption from registration under the 1940 Act.

REITs (especially mortgage REITs) are also subject to interest rate risks. When interest rates decline, the value of a REIT’s investment in fixed rate obligations can be expected to rise. Conversely, when interest rates rise, the value of a REIT’s investment in fixed rate obligations can be expected to decline. In contrast, as interest rates on

adjustable rate mortgage loans are reset periodically, yields on a REIT’s investment in such loans will gradually align themselves to fluctuate less dramatically in response to interest rate fluctuations than would investments in fixed rate obligations.

Investment in REITs involves risks similar to those associated with investing in small capitalization companies. These risks include:

•

limited financial resources;

•

infrequent or limited trading; and

•

more abrupt or erratic price movements than larger company securities.

In addition, small capitalization stocks, such as REITs, historically have been more volatile in price than the larger capitalization stocks included in the S&P 500 Index.

Repurchase Agreements

The Funds may enter into repurchase agreements with brokers, dealers or banks that meet the Investment Adviser’s credit guidelines. A Fund will enter into repurchase agreements only with member banks of the Federal Reserve System and securities dealers believed creditworthy, and only if the agreement is collateralized by securities in which the Fund is permitted to invest. In a repurchase agreement, a Fund buys a security from a seller that has agreed to repurchase the same security at a mutually agreed upon date and price. The resale price normally is in excess of the purchase price, reflecting an agreed upon interest rate. This interest rate is effective for the period of time a Fund is invested in the agreement and is not related to the coupon rate on the underlying security. A repurchase agreement may also be viewed as a fully collateralized loan of money by a Fund to the seller. The period of these repurchase agreements will usually be short, from overnight to one week, and at no time will the Funds invest in repurchase agreements for more than thirteen months. The securities which are subject to repurchase agreements, however, may have maturity dates in excess of thirteen months from the effective date of the repurchase agreement. Repurchase agreements maturing in more than seven days are treated as illiquid for purposes of the Funds’ restrictions on purchases of illiquid securities. The Funds will always receive securities as collateral during the term of the agreement whose market value is at least equal to 100% of the dollar amount invested by the Funds in each agreement plus accrued interest. The repurchase agreements further authorize the Funds to demand additional collateral in the event that the value of the collateral falls below 100%. The Funds will make payment for such securities only upon physical delivery or upon evidence of book entry transfer to the account of the Custodian.

A repurchase agreement is subject to the risk that the seller may fail to repurchase the security. In the event of default by the seller under a repurchase agreement construed to be a collateralized loan, the underlying securities would not be owned by the Fund, but would only constitute collateral for the seller’s obligation to pay the repurchase price. Therefore, a Fund may suffer time delays and incur costs in connection with the disposition of the collateral. The collateral underlying repurchase agreements may be more susceptible to claims of the seller’s creditors than would be the case with securities owned by the Fund.

Certain of the Funds may invest in repurchase agreements where the underlying securities are non-governmental securities but only if the Funds would be permitted to invest in such securities directly. These repurchase securities are subject to additional risks.

Reverse Repurchase Agreements

Some of the Funds may borrow money for temporary purposes by entering into reverse repurchase agreements. Pursuant to such agreements, a Fund would sell portfolio securities to financial institutions such as banks and broker-dealers, and agree to repurchase them at a mutually agreed-upon date and price. A Fund would enter into reverse repurchase agreements only to avoid otherwise selling securities during unfavorable market conditions to meet redemptions. At the time a Fund entered into a reverse repurchase agreement, it would place in a segregated custodial account assets, such as cash or liquid securities consistent with the Fund’s investment restrictions and having a value equal to the repurchase price (including accrued interest), and would subsequently monitor the account to ensure that such equivalent value was maintained. Reverse repurchase agreements involve the risk that the market value of the securities sold by a Fund may decline below the price at which the Fund is obligated to repurchase the securities. Reverse repurchase agreements are considered by the SEC to be borrowings by a Fund under the 1940 Act.

Restricted Securities

Some of the Funds may invest in commercial paper issued in reliance on the exemption from registration afforded by Section 4(2) of the 1933 Act and other restricted securities. Section 4(2) commercial paper is restricted as to disposition under federal securities law and is generally sold to institutional investors, such as the Funds, that agree that they are purchasing the paper for investment purposes and not with a view to public distribution. Any resale by the purchaser must be in an exempt transaction. Section 4(2) commercial paper is normally resold to other institutional investors like the Funds through or with the assistance of the issuer or investment dealers who make a market in Section 4(2) commercial paper, thus providing liquidity. The Funds believe that Section 4(2) commercial paper and possibly certain other restricted securities which meet the criteria for liquidity established by the Trustees are quite liquid. The Funds intend, therefore, to treat restricted securities that meet the liquidity criteria established by the Board of Trustees, including Section 4(2) commercial paper and Rule 144A Securities, as determined by JPMIM, as liquid and not subject to the investment limitation applicable to illiquid securities.

The ability of the Trustees to determine the liquidity of certain restricted securities is permitted under an SEC Staff position set forth in the adopting release for Rule 144A under the 1933 Act (“RULE 144A”). Rule 144A is a nonexclusive safe-harbor for certain secondary market transactions involving securities subject to restrictions on resale under federal securities laws. Rule 144A provides an exemption from registration for resales of otherwise restricted securities to qualified institutional buyers. Rule 144A was expected to further enhance the liquidity of the secondary market for securities eligible for resale. The Funds believe that the Staff of the SEC has left the question of determining the liquidity of all restricted securities to the Trustees. The Trustees have directed JPMIM to consider the following criteria in determining the liquidity of certain restricted securities:

•

the frequency of trades and quotes for the security;

•

the number of dealers willing to purchase or sell the security and the number of other potential buyers;

•

dealer undertakings to make a market in the security; and

•

the nature of the security and the nature of the marketplace trades.

Certain Section 4(2) commercial paper programs cannot rely on Rule 144A because, among other things, they were established before the adoption of the rule. However, the Trustees may determine for purposes of the Trust’s liquidity requirements that an issue of 4(2) commercial paper is liquid if the following conditions, which are set forth in a 1994 SEC staff no-action letter, are met:

•

The 4(2) paper must not be traded flat or in default as to principal or interest;

•

The 4(2) paper must be rated in one of the two highest rating categories by at least two NRSROs, or if only one NRSRO rates the security, by that NRSRO, or if unrated, is determined by JPMIM to be of equivalent quality;

•

JPMIM must consider the trading market for the specific security, taking into account all relevant factors, including but not limited, to whether the paper is the subject of a commercial paper program that is administered by an issuing and paying agent bank and for which there exists a dealer willing to make a market in that paper, or is administered by a direct issuer pursuant to a direct placement program;

•

JPMIM shall monitor the liquidity of the 4(2) commercial paper purchased and shall report to the Board of Trustees promptly if any such securities are no longer determined to be liquid if such determination causes a Fund to hold more than 15% of its net assets in illiquid securities in order for the Board of Trustees to consider what action, if any, should be taken on behalf of the Trust, unless JPMIM is able to dispose of illiquid assets in an orderly manner in an amount that reduces the Fund’s holdings of illiquid assets to less than 15% of its net assets; and

•

JPMIM shall report to the Board of Trustees on the appropriateness of the purchase and retention of liquid restricted securities under these guidelines no less frequently than quarterly.

Securities issued in connection with Reorganizations and Corporate Restructurings

The Funds may only invest in securities that are rated investment grade at the time of purchase. Despite their quality at the time of purchase, debt securities may be downgraded and issuers of debt securities including investment grade securities may default in the payment of principal or interest or be subject to bankruptcy proceedings. In connection with reorganizing or restructuring of an issuer, an issuer may issue common stock or other securities to holders of its debt securities. The Funds including the Ultra Short-Term Bond Trust, the Short-Term Bond Trust, the Intermediate Bond Trust, and the Core Bond Trust, may hold such common stock and other securities even if they do not invest in such securities.

Securities Lending

To generate additional income, each of the Funds except the Ultra Short-Term Bond Trust, may lend up to 33 ¹/3% of such Fund’s total assets pursuant to agreements requiring that the loan be continuously secured by cash as collateral equal at all times to at least 100% of the market value plus accrued interest on the securities lent. The Funds receive payments from the borrowers equivalent to the dividends and interest which would have been earned on the securities lent while simultaneously seeking to earn interest on the investment of cash collateral in investments permitted by the Confidential Offering Memorandum and the investment guidelines approved by the Trust’s board of trustees. Collateral is marked to market daily to provide a level of collateral at least equal to the market value plus accrued interest of the securities lent. There may be risks of delay in recovery of the securities or even loss of rights in the collateral should the borrower of the securities fail financially. However, loans will only be made to borrowers authorized pursuant to the Securities Lending Agreement with the Funds. Loans are subject to termination by the Funds or the borrower at any time, and are therefore, not considered to be illiquid investments. The Funds do not have the right to vote proxies for securities on loan. However, JPMIM will instruct the securities lending agent to terminate a loan and regain the right to vote if it were considered material with respect to an investment.

Short-Term Funding Agreements

To enhance yield, some Funds may make limited investments in short-term funding agreements issued by banks and highly rated U.S. insurance companies. Short-term funding agreements issued by insurance companies are sometimes referred to as Guaranteed Investment Contracts (“GICs”), while those issued by banks are referred to as Bank Investment Contracts (“BICs”). Pursuant to such agreements, the Funds make cash contributions to a deposit account at a bank or insurance company. The bank or insurance company then credits to the Funds on a monthly basis guaranteed interest at either a fixed, variable or floating rate. These contracts are general obligations of the issuing bank or insurance company (although they may be the obligations of an insurance company separate account) and are paid from the general assets of the issuing entity.

The Funds will purchase short-term funding agreements only from banks and insurance companies which, at the time of purchase, are rated in one of the three highest rating categories and have assets of $1 billion or more. Generally, there is no active secondary market in short-term funding agreements. Therefore, short-term funding agreements may be considered by the Funds to be illiquid investments. To the extent that a short-term funding agreement is determined to be illiquid, such agreements will be acquired by the Funds only if, at the time of purchase, no more than 15% of the Fund’s net assets will be invested in short-term funding agreements and other illiquid securities.

Structured Instruments

Structured instruments are debt securities issued by agencies of the U.S. Government (such as Ginnie Mae, Fannie Mae, and Freddie Mac), banks, corporations, and other business entities whose interest and/or principal payments are indexed to certain specific foreign currency exchange rates, interest rates, or one or more other reference indices. Structured instruments frequently are assembled in the form of medium-term notes, but a variety of forms are available and may be used in particular circumstances. Structured instruments are commonly considered to be derivatives.

The terms of such structured instruments provide that their principal and/or interest payments are adjusted upwards or downwards to reflect changes in the reference index while the structured instruments are outstanding. In addition, the reference index may be used in determining when the principal is redeemed. As a result, the interest and/or principal payments that may be made on a structured product may vary widely, depending on a variety of factors, including the volatility of the reference index and the effect of changes in the reference index on principal and/or interest payment.

While structured instruments may offer the potential for a favorable rate of return from time to time, they also entail certain risks. Structured instruments may be less liquid than other debt securities, and the price of structured instruments may be more volatile. If the value of the reference index changes in a manner other than that expected by JPMIM, principal and/or interest payments on the structured instrument may be substantially less than expected. In addition, although structured instruments may be sold in the form of a corporate debt obligation, they may not have some of the protection against counterparty default that may be available with respect to publicly traded debt securities (i.e., the existence of a trust indenture). In that respect, the risks of default associated with structured instruments may be similar to those associated with swap contracts. See “Swaps, Caps and Floors.”

The Funds that are permitted to invest in structured instruments will invest only in structured securities that are consistent with each Fund’s investment objective, policies and restrictions and JPMIM outlook on market conditions. In some cases, depending on the terms of the reference index, a structured instrument may provide that the principal and/or interest payments may be adjusted below zero; however, the Funds will not invest in structured instruments if the terms of the structured instrument provide that the Funds may be obligated to pay more than their initial investment in the structured instrument, or to repay any interest or principal that has already been collected or paid back.

Structured instruments that are registered under the federal securities laws may be treated as liquid. In addition, many structured instruments may not be registered under the federal securities laws. In that event, a Fund’s ability to resell such a structured instrument may be more limited than its ability to resell other Fund securities. The Funds will treat such instruments as illiquid, and will limit their investments in such instruments to no more than 15% of each Fund’s net assets, when combined with all other illiquid investments of each Fund.

Swaps, Caps and Floors

Certain of the Funds may enter into swaps, caps, and floors (collectively, “Swap Contracts”) on various securities (such as U.S. Government securities), securities indexes, interest rates, prepayment rates, foreign currencies or other financial instruments or indexes, in order to protect the value of the Fund from interest rate fluctuations and to hedge against fluctuations in the floating rate market in which the Fund’s investments are traded. Some transactions may reduce each Fund’s exposure to market fluctuations while others may tend to increase market exposure. The Funds may enter into these transactions to manage their exposure to changing interest rates or other market factors or for non-hedging purposes. Although different from options, futures, and options on futures, Swap Contracts are used by the Funds for similar purposes (i.e., risk management, hedging, and as a substitute for direct investments in underlying securities) and therefore, expose the Funds to generally the same risks and opportunities as those investments.

Swap Contracts typically involve an exchange of obligations by two sophisticated parties. For example, in an interest rate swap, the Fund may exchange with another party their respective rights to receive interest, such as an exchange of fixed rate payments for floating rate payments.

Currency swaps involve the exchange of respective rights to make or receive payments in specified currencies. Mortgage swaps are similar to interest rate swaps in that they represent commitments to pay and receive interest. The notional principal amount, however, is tied to a reference pool or pools of mortgages.

Caps and floors are variations on swaps. The purchase of a cap entitles the purchaser to receive a principal amount from the party selling the cap to the extent that a specified index exceeds a predetermined interest rate or amount. The purchase of an interest rate floor entitles the purchaser to receive payments on a notional principal

amount from the party selling the floor to the extent that a specified index falls below a predetermined interest rate or amount. Caps and floors are similar in many respects to over-the-counter options transactions, and may involve investment risks that are similar to those associated with options transactions and options on futures contracts.

Because Swap Contracts are individually negotiated, they remain the obligation of the respective counterparties, and there is a risk that a counterparty will be unable to meet its obligations under a particular swap contract. If a counterparty defaults on a swap contract with a Fund, the Fund may suffer a loss. To address this risk, each Fund will usually enter into interest rate swaps on a net basis, which means that the two payment streams (one from the Fund to the counterparty, one to the Fund from the counterparty) are netted out, with the Fund receiving or paying, as the case may be, only the net amount of the two payments.

Interest rate swaps do not involve the delivery of securities, other underlying assets, or principal, except for the purposes of collateralization as discussed below. Accordingly, the risk of loss with respect to interest rate swaps entered into on a net basis would be limited to the net amount of the interest payments that the Fund is contractually obligated to make. If the other party to an interest rate swap defaults, the Fund’s risk of loss consists of the net amount of interest payments that a Fund is contractually entitled to receive. In addition, the Fund may incur a market value adjustment on securities held upon the early termination of the swap. To protect against losses related to counterparty default, the Funds may enter into swaps that require transfers of collateral for changes in market value.

In contrast, currency swaps and other types of swaps may involve the delivery of the entire principal value of one designated currency or financial instrument in exchange for the other designated currency or financial instrument. Therefore, the entire principal value of such swaps may be subject to the risk that the other party will default on its contractual delivery obligations.

In addition, because Swap Contracts are individually negotiated and ordinarily non-transferable, there also may be circumstances in which it would be impossible for a Fund to close out its obligations under the swap contract prior to its maturity. Under such circumstances, the Fund might be able to negotiate another swap contract with a different counterparty to offset the risk associated with the first swap contract. Unless the Fund is able to negotiate such an offsetting swap contract, however, the Fund could be subject to continued adverse developments, even after JPMIM has determined that it would be prudent to close out or offset the first swap contract.

The Funds that may utilize swaps, caps and floors will not enter into any mortgage swap, interest rate swap, cap or floor transaction unless the unsecured commercial paper, senior debt, or the claims paying ability of the other party thereto is rated in one of the top two rating categories by at least one NRSRO, or if unrated, determined by JPMIM to be of comparable quality.

The use of swaps involves investment techniques and risks different from and potentially greater than those associated with ordinary Fund securities transactions. If JPMIM is incorrect in its expectations of market values, interest rates, or currency exchange rates, the investment performance of the Funds would be less favorable than it would have been if this investment technique were not used. In addition, in certain circumstances entry into a swap contract that substantially eliminates risk of loss and the opportunity for gain in an “appreciated financial position” will accelerate gain to the Funds.

The Funds will treat swaps, caps and floors as being subject to their senior securities restrictions. To the extent the net amount of an interest rate or mortgage swap is held in a segregated account, consisting of cash or liquid portfolio securities, the Funds and JPMIM believe that swaps do not constitute senior securities under the 1940 Act and, accordingly, will not treat them as being subject to each Fund’s borrowing restrictions. The net amount of the excess, if any, of each Fund’s obligations over its entitlements with respect to each interest rate swap will be accrued on a daily basis, and an amount of cash or liquid securities having an aggregate net asset value at least equal to the accrued excess will be maintained in a segregated account by the Funds’ custodian. Each of the Bond Funds generally will limit their investments in swaps, caps and floors to 25% of its total assets.

Treasury Receipts

Certain of the Funds may purchase interests in separately traded interest and principal component parts of U.S. Treasury obligations that are issued by banks or brokerage firms and are created by depositing U.S. Treasury notes and U.S. Treasury bonds into a special account at a custodian bank. Receipts include Treasury Receipts

(“TRs”), Treasury Investment Growth Receipts (“TIGRs”), and Certificates of Accrual on Treasury Securities (“CATS”). Receipts in which an entity other than the government separates the interest and principal components are not considered government securities unless such securities are issued through the Treasury STRIPS program.

U.S. Treasury Obligations

The Funds may invest in bills, notes and bonds issued by the U.S. Treasury and separately traded interest and principal component parts of such obligations that are transferable through the Federal book-entry system known as Separately Traded Registered Interest and Principal Securities (“STRIPS”) and Coupon Under Book Entry Safekeeping (“CUBES”). The Funds may also invest in Inflation Indexed Treasury Obligations.

Variable and Floating Rate Instruments

Certain obligations purchased by some of the Funds may carry variable or floating rates of interest, may involve a conditional or unconditional demand feature and may include variable amount master demand notes.

VARIABLE AMOUNT MASTER DEMAND NOTES are demand notes that permit the indebtedness to vary and provide for periodic adjustments in the interest rate according to the terms of the instrument. Because master demand notes are direct lending arrangements between a Fund and the issuer, they are not normally traded. Although there is no secondary market in the notes, a Fund may demand payment of principal and accrued interest. While the notes are not typically rated by credit rating agencies, issuers of variable amount master demand notes (which are normally manufacturing, retail, financial, brokerage, investment banking and other business concerns) must satisfy the same criteria as set forth above for commercial paper. JPMIM will consider the earning power, cash flow, and other liquidity ratios of the issuers of such notes and will continuously monitor their financial status and ability to meet payment on demand. In determining average weighted portfolio maturity, a variable amount master demand note will be deemed to have a maturity equal to the period of time remaining until the principal amount can be recovered from the issuer through demand.

Some of the Funds, subject to their investment objective policies and restrictions, may acquire VARIABLE AND FLOATING RATE INSTRUMENTS. A variable rate instrument is one whose terms provide for the adjustment of its interest rate on set dates and which, upon such adjustment, can reasonably be expected to have a market value that approximates its par value. Some of the Funds may purchase EXTENDABLE COMMERCIAL NOTES. Extendable commercial notes are variable rate notes which normally mature within a short period of time (e.g., 1 month) but which may be extended by the issuer for a maximum maturity of thirteen months.

A floating rate instrument is one whose terms provide for the adjustment of its interest rate whenever a specified interest rate changes and which, at any time, can reasonably be expected to have a market value that approximates its par value. Floating rate instruments are frequently not rated by credit rating agencies; however, unrated variable and floating rate instruments purchased by a Fund will be determined by JPMIM under guidelines established by the Trust’s Board of Trustees to be of comparable quality at the time of purchase to rated instruments eligible for purchase under the Fund’s investment policies. In making such determinations, JPMIM will consider the earning power, cash flow and other liquidity ratios of the issuers of such instruments (such issuers include financial, merchandising, bank holding and other companies) and will continuously monitor their financial condition. There may be no active secondary market with respect to a particular variable or floating rate instrument purchased by a Fund. The absence of such an active secondary market could make it difficult for the Fund to dispose of the variable or floating rate instrument involved in the event the issuer of the instrument defaulted on its payment obligations, and the Fund could, for this or other reasons, suffer a loss to the extent of the default. Variable or floating rate instruments may be secured by bank letters of credit or other assets. A Fund may purchase a variable or floating rate instrument to facilitate portfolio liquidity or to permit investment of the Fund’s assets at a favorable rate of return.

Warrants

Warrants are securities, typically issued with preferred stock or bonds, that give the holder the right to buy a proportionate amount of common stock at a specified price, usually at a price that is higher than the market price at the time of issuance of the warrant. The right may last for a period of years or indefinitely. In some situations, it may be advantageous for a Fund to exercise a warrant to preserve the value of the investment. If a warrant is exercised, a Fund may hold common stock in its portfolio even if it does not invest in common stock.

When-Issued Securities and Forward Commitments

Some Funds may purchase securities on a “when-issued” and forward commitment basis. When a Fund agrees to purchase securities on this basis, the Fund’s custodian will set aside cash or liquid portfolio securities equal to the amount of the commitment in a separate account. The Funds may purchase securities on a when-issued basis when deemed by JPMIM to present attractive investment opportunities. When-issued securities are purchased for delivery beyond the normal settlement date at a stated price and yield, thereby involving the risk that the yield obtained will be less than that available in the market at delivery. The Funds generally will not pay for such securities or earn interest on them until received. Although the purchase of securities on a when-issued basis is not considered to be leveraging, it has the effect of leveraging. When JPMIM purchases a when-issued security, the custodian will set aside cash or liquid securities to satisfy the purchase commitment. In such a case, a Fund may be required subsequently to place additional assets in the separate account in order to assure that the value of the account remains equal to the amount of the Fund’s commitment. In addition, when a Fund engages in “when-issued” transactions, it relies on the seller to consummate the trade. Failure of the seller to do so may result in the Fund’s incurring a loss or missing the opportunity to obtain a price considered to be advantageous.

In a forward commitment transaction, the Funds contract to purchase securities for a fixed price at a future date beyond customary settlement time. The Funds are required to hold and maintain in a segregated account until the settlement date, cash, U.S. government securities or liquid portfolio securities in an amount sufficient to meet the purchase price. Alternatively, the Funds may enter into offsetting contracts for the forward sale of other securities that they own. The purchase of securities on a when-issued or forward commitment basis involves a risk of loss if the value of the security to be purchased declines prior to the settlement date.

Limitations on the Use of When-Issued Securities and Forward Commitments. No Fund intends to purchase “when-issued” securities for speculative purposes but only for the purpose of acquiring portfolio securities. Because a Fund will set aside cash or liquid portfolio securities to satisfy its purchase commitments in the manner described, the Fund’s liquidity and the ability of JPMIM to manage the Fund might be affected in the event its commitments to purchase when-issued securities ever exceeded 40% of the value of its assets. Commitments to purchase when-issued securities will not, under normal market conditions, exceed 25% of a Fund’s total assets. A Fund may dispose of a when-issued security or forward commitment prior to settlement if JPMIM deems it appropriate to do so.

INVESTMENT RESTRICTIONS

The following investment restrictions are FUNDAMENTAL and may be changed with respect to a particular Fund only by a vote of a majority of the outstanding Shares of that Fund. See “ADDITIONAL INFORMATION—Miscellaneous” in this Supplement. Additional investment restrictions may be found in the Confidential Offering Memorandum.

FUNDAMENTAL POLICIES

The Funds have adopted certain investment restrictions that are fundamental and may not be changed without approval by a majority vote of the Funds’ shareholders. Such majority is defined in the 1940 Act as the lesser of (i) 67% or more of the voting securities of the Funds present in person or by proxy at a meeting, if the holders of more than 50% of the outstanding voting securities are present or represented by proxy; or (ii) more than 50% of the outstanding voting securities of the Funds.

Borrowing. The Funds may (i) borrow for non-leveraging, temporary or emergency purposes and (ii) engage in reverse repurchase agreements, make other investments or engage in other transactions, that may involve a borrowing, in a manner consistent with the Funds’ investment objective and program, provided that the combination of (i) and (ii) shall not exceed 33-1/3% of the value of the Funds’ total assets (including the amount borrowed) less liabilities (other than borrowings) or such other percentage permitted by law. Any borrowings which come to exceed this amount will be reduced in accordance with applicable law. The Funds may borrow from banks or other persons to the extent permitted by applicable law.

2.	*Senior Securities.* The Funds may not issue senior securities, except as permitted under the 1940 Act.

Underwriting. The Funds may not underwrite securities issued by other persons, except to the extent that the Funds may be deemed to be an underwriter, within the meaning of the 1933 Act, in connection with the purchase and sale of its portfolio securities in the ordinary course of pursuing its investment objective, policies and program.

Purchases of Commodities. The Funds may not purchase or sell physical commodities, except that it may (i) enter into futures contracts and options thereon in accordance with applicable law and (ii) purchase or sell physical commodities if acquired as a result of ownership of securities or other instruments. The Funds will not consider stock index futures contracts, currency contracts, hybrid investments, swaps or other similar instruments to be commodities.

Loans. The Funds may not lend any security or make any loan if, as a result, more than 33-1/3% of its total assets would be lent to other parties. This limitation does not apply to purchases of publicly distributed or privately placed debt securities or money market instruments or to entering into repurchase agreements by the Funds.

Concentration. The Funds may not purchase the securities of any issuer if, as a result, more than 25% of the Funds’ total assets would be invested in the securities of issuers, the principal business activities of which are in the same industry, provided that this limitation does not apply to investment in obligations issued or guaranteed by the United States Government, state or local governments, or their agencies or instrumentalities.

Real Estate. The Funds may not purchase or sell real estate, except that the Funds may purchase (i) securities of issuers that invest or deal in real estate, (ii) securities that are directly or indirectly secured by real estate or interests in real estate, and (iii) securities that represent interests in real estate, and the Funds may acquire and dispose of real estate or interests in real estate acquired through the exercise of its rights as a holder of debt obligations secured by real estate or interests therein. In addition, the Funds may make direct investments in mortgages.

Diversification. The Funds may not, with respect to 75% of its total assets, purchase the securities of any issuer (other than securities issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities, or securities of other investment companies) if, as a result, (i) more than 5% of the Funds’ total assets would be invested in the securities of that issuer, or (ii) the Funds would hold more than 10% of the voting securities of any one issuer.

NON-FUNDAMENTAL POLICIES

The following investment restrictions are NON-FUNDAMENTAL except as noted otherwise and therefore can be changed by the Board of Trustees without prior shareholder approval.

The following policy applies to the Equity Index Trust:

The Fund may not invest more than 10% of its total assets in securities issued or guaranteed by the United States, its agencies or instrumentalities. Repurchase agreements held in margin deposits and segregated accounts for futures contracts are not considered issued or guaranteed by the United States, its agencies or instrumentalities for purposes of the 10% limitation.

Temporary Defensive Positions

To respond to unusual market conditions, certain of the Funds may invest their assets in cash or CASH EQUIVALENTS (see below) for temporary defensive purposes. These investments may result in a lower yield than lower-quality or longer term investments and may prevent the Funds from meeting their investment objectives. The percentage of assets that a Fund may invest in cash or cash equivalents is described in the Confidential Offering Memorandum. Cash Equivalents are highly liquid, high quality instruments with maturities of three months or less on the date they are purchased. They include securities issued by the U.S. government, its agencies and instrumentalities, repurchase agreements (other than equity repurchase agreements), certificates of deposit, bankers’ acceptances, commercial paper (rated in one of the two highest rating categories), variable rate master demand notes, money market mutual funds, and bank money market deposit accounts.

Portfolio Turnover

The portfolio turnover rate for each Fund is calculated by dividing the lesser of purchases or sales of portfolio securities for the year by the monthly average value of the portfolio securities. The calculation excludes all securities whose maturities at the time of acquisition were one year or less.

The portfolio turnover rates of the operational Funds of the Trust for the period from February 7, through June 30, 2005 were as follows:


Funds	Fiscal Year Ended June 30, 2005
Core Bond Trust	6	%
Equity Index Trust	5	%
Intermediate Bond Trust	6	%

TAX INFORMATION

Additional Tax Information Concerning all Funds

Each Fund is treated as a separate entity for federal income tax purposes and is not combined with the Trust’s other Funds. Each Fund intends to meet the requirements necessary to qualify each year as a “regulated investment company” under Subchapter M of the Code. If the Funds so qualify, they will pay no federal income tax on the earnings they distribute to shareholders and they will eliminate or reduce to a nominal amount the federal income taxes to which they may be subject.

In order to qualify as a regulated investment company, each Fund must, among other things, (1) derive at least 90% of its gross income from dividends, interest, certain payments with respect to securities loans, gains from the sale or other disposition of stock or securities, or foreign currencies (to the extent such currency gains are directly related to a Fund’s principal business of investing in stock or securities, or options or futures with respect to stock or securities) or other income (including gains from options, futures or forward contracts) derived with respect to its business of investing in stock, securities or currencies, and (2) diversify its holdings so that at the end of each quarter of its taxable year (i) at least 50% of the market value of the Fund’s assets is represented by cash or cash items (including receivables), U.S. government securities, securities of other regulated investment companies, and other securities limited, in respect of any one issuer, to an amount not greater than 5% of the value of the Fund’s assets and 10% of the outstanding voting securities of such issuer, and (ii) not more than 25% of the value of its assets is invested in (x) the securities of any one issuer (other than U.S. government securities or the securities of other regulated investment companies) or of two or more issuers that the Fund controls and that are engaged in the same, similar, or related trades or businesses or (y) in the securities of one or more qualified publicly traded partnership (defined below).

In general, for purposes of the 90% gross income requirement described in the paragraph above, income derived from a partnership will be treated as qualifying income only to the extent such income is attributable to items of income of the partnership which would be qualifying income if realized by the regulated investment company. However, the American Jobs Creation Act of 2004 (the “2004 Act”), provides that for taxable years of a regulated investment company beginning after October 22, 2004, 100% of the net income derived from an interest in a “qualified publicly traded partnership” (defined as a partnership (i) interests in which are traded on an established securities market or readily tradable on a secondary market or the substantial equivalent thereof and (ii) that derives less than 90% of its income from the qualifying income described in (1) above) will be treated as qualifying income. In addition, although in general the passive loss rules of the Code do not apply to regulated investment companies, such rules do apply to a regulated investment company with respect to items attributable to an interest in a qualified publicly traded partnership. Finally, for purposes of the paragraph above, the term “outstanding voting securities of such issuer” will include the equity securities of a qualified publicly traded partnership. These requirements may limit the range of the Fund’s investments.

If a Fund qualifies as a regulated investment company, it will not be subject to federal income tax on the part of its income distributed to Shareholders, provided the Fund distributes during its taxable year at least 90% of the sum of (a) its taxable net investment income (very generally, dividends, interest, certain other income, and the excess, if any, of net short-term capital gain over net long-term loss), and (b) its net tax-exempt interest. Each Fund of the Trust intends to make sufficient distributions to Shareholders to qualify for this special tax treatment.

If a Fund were to fail to qualify as a regulated investment company receiving special tax treatment in any taxable year, the Fund would be subject to tax on its taxable income at corporate rates, and all distributions from earnings and profits, including any distributions of net tax-exempt income and net long-term capital gains, would be taxable to Shareholders as ordinary income. In addition, in order to requalify for taxation as a regulated investment company, the Fund could be required to recognize unrealized gains, pay substantial taxes and interest and make certain distributions.

Generally, regulated investment companies that do not distribute in each calendar year an amount at least equal to the sum of (i) 98% of their “ordinary income” (as defined in the Code) for the calendar year, (ii) 98% of their capital gain net income (as defined in the Code) for the one-year period ending on October 31 of such calendar year (or later if the company is permitted to elect and so elects), and (iii) any undistributed amounts from the previous year, are subject to a non-deductible excise tax equal to 4% of the underdistributed amounts. For purposes of the excise tax, a Fund is treated as having distributed any amount on which it is subject to income tax for any taxable year ending in such calendar year. A dividend paid to Shareholders in January generally is deemed to have been paid on December 31 of the preceding year, if the dividend was declared and payable to Shareholders of record on a date in October, November, or December of the preceding year. Each Fund of the Trust intends to make sufficient distributions to avoid liability for the excise tax.

For federal income tax purposes, distributions of investment income are generally taxable as ordinary income. Taxes on distributions of capital gains are determined by how long a Fund owned the investments that generated them, rather than how long a Shareholder has owned his or her shares. Distributions of net capital gains from the sale of investments that a Fund has owned for more than one year and that are properly designated by that Fund as capital gain dividends (“Capital Gain Dividends”) will be taxable as long-term capital gains. Distributions of gains from the sale of investments that a Fund owned for one year or less will be taxable as ordinary income.

For taxable years beginning on or before December 31, 2008, “qualified dividend income” received by an individual will be taxed at the rates applicable to long-term capital gain. In order for some portion of the dividends received by a Fund shareholder to be qualified dividend income, the Fund must meet holding period and other requirements with respect to some portion of the dividend paying stocks in its portfolio and the shareholder must meet holding period and other requirements with respect to the Fund’s shares. A dividend will not be treated as qualified dividend income (at either the Fund or shareholder level) (1) if the dividend is received with respect to any share of stock held for fewer than 61 days during the 121-day period beginning on the date which is 60 days before the date on which such share becomes ex-dividend with respect to such dividend (or, in the case of certain preferred stock, 91 days during the 181-day period beginning 90 days before such date), (2) to the extent that the recipient is under an obligation (whether pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property, (3) if the recipient elects to have the dividend income treated as investment interest, or (4) if the dividend is received from a foreign corporation that is (a) not eligible for the benefits of a comprehensive income tax treaty with the United States (with the exception of dividends paid on stock of such a foreign corporation readily tradable on an established securities market in the United States) or (b) treated as a passive foreign investment company.

In general, distributions of investment income designated by a Fund as derived from qualified dividend income will be treated as qualified dividend income by a shareholder taxed as an individual provided the shareholder meets the holding period and other requirements described above with respect to such Fund’s shares. In any event, if the aggregate qualified dividends received by a Fund during any taxable year are 95% or more of its gross income, then 100% of that Fund’s dividends (other than property designated capital gain dividends) will be eligible to be treated as qualified dividend income. For this purpose, the only gain included in the term “gross income” is the excess of net short-term capital gain over net long-term capital loss.

Long-term capital gain rates applicable to individuals have been temporarily reduced – in general, to 15% with lower rates applying to taxpayers in the 10% and 15% rate brackets – for taxable years beginning on or before December 31, 2008.

Distributions in excess of a Fund’s current and accumulated “earnings and profits” will be treated by a Shareholder receiving such distributions as a return of capital to the extent of such Shareholder’s basis in its Shares in the Fund, and thereafter as capital gain. A return of capital is not taxable, but reduces a Shareholder’s basis in its shares. Shareholders not subject to tax on their income generally will not be required to pay tax on amounts distributed to them. Dividends and distributions on a Fund’s shares are generally subject to federal income tax as described herein to the extent they do not exceed the Fund’s realized income and gains, even though such dividends and distributions may economically represent a return of a particular shareholder’s investment. Such distributions are likely to occur in respect of shares purchased at a time when the Fund’s net asset value reflects gains that are either unrealized, or realized but not distributed.

The sale, exchange or redemption of Fund shares by a Shareholder may give rise to a taxable gain or loss to that Shareholder. In general, any gain or loss realized upon a taxable disposition of shares will be treated as long-term capital gain or loss if the Shareholder has held the shares for more than 12 months, and otherwise as short-term capital gain or loss.

If a Shareholder sells shares at a loss within six months of purchase, any loss will be disallowed for federal income tax purposes to the extent of any exempt-interest dividends received on such shares. In addition, any loss (not already disallowed as provided in the preceding sentence) realized upon a taxable disposition of shares held for six months or less will be treated as long-term to the extent of any long-term capital gain distributions received by the Shareholder with respect to the shares. All or a portion of any loss realized upon a taxable disposition of Fund shares will be disallowed if other Fund shares are purchased within 30 days before or after the disposition. In such a case, the basis of the newly purchased shares will be adjusted to reflect the disallowed loss.

Under Treasury regulations, if a shareholder recognized a loss with respect to a Fund’s shares of $2 million or more for an individual shareholder or $10 million or more for a corporate shareholder, the shareholder must file with the Internal Revenue Service a disclosure statement on Form 8886. Direct shareholders of portfolio securities are in many cases excepted from this reporting requirement, but under current guidance, shareholders of a regulated investment company are not excepted. Future guidance may extend the current exception from this reporting requirement to shareholders of most or all regulated investment companies. The fact that a loss is reportable under these regulations does not affect the legal determination of whether the taxpayer’s treatment of the loss is proper. Shareholders should consult their individual tax advisers to determine the applicability of these regulations in light of their individual circumstances.

Certain investment and hedging activities of the Funds, including transactions in options, futures contracts, hedging transactions, forward contracts, straddles, swaps, short sales, foreign currencies, and foreign securities will be subject to special tax rules (including mark-to-market, constructive sale, straddle, wash sale and short sale rules). In a given case, these rules may accelerate income to the Fund, defer losses to the Fund, cause adjustments in the holding periods of the Fund’s securities, convert long-term capital gains into short-term capital gains, convert short-term capital losses into long-term capital losses, or otherwise affect the character of the Fund’s income. These rules could therefore affect the amount, timing and character of distributions to Shareholders and cause differences between a Fund’s book income and taxable income. Income earned as a result of these transactions would, in general, not be eligible for the dividends-received deduction or for treatment as exempt-interest dividends when distributed to Shareholders. The Fund will endeavor to make any available elections pertaining to such transactions in a manner believed to be in the best interest of the Fund.

Certain debt securities purchased by the Funds (such as STRIPS, CUBES, TRs, TIGRs, and CATS), as defined in the Confidential Offering Memorandum, are sold at original issue discount and thus do not make periodic cash interest payments. Similarly, zero-coupon bonds do not make periodic interest payments. A Fund will be required to include as part of its current income for tax purposes the imputed interest on such obligations even though the Fund has not received any interest payments on such obligations during that period. Because each Fund distributes substantially all of its net investment income to its Shareholders (including such imputed interest), the Fund may have to sell portfolio securities in order to generate the cash necessary for the required distributions. Such sales may occur at a time when JPMIM would not otherwise have chosen to sell such securities and may result in a taxable gain or loss.

The Fund generally is required to withhold and remit to the U.S. Treasury a percentage of the taxable dividends and other distributions paid to, and the proceeds of share sales, exchanges, or redemptions made by, any

individual shareholder who fails to properly furnish the Fund with a correct taxpayer identification number (TIN), who has under-reported dividend or interest income, or who fails to certify to the Fund that he or she is not subject to such withholding. Pursuant to recently enacted tax legislation, the backup withholding tax rate is 28% for amounts paid through 2010. This legislation will expire and the backup withholding rate will be 31% for amounts paid after December 31, 2010, unless Congress enacts tax legislation providing otherwise.

The foregoing is only a summary of some of the important federal tax considerations generally affecting purchasers of Shares of a Fund of the Trust. No attempt is made to present herein a complete explanation of the federal income tax treatment of each Fund or its Shareholders, and this discussion is not intended as a substitute for careful tax planning. Accordingly, prospective purchasers of Shares of a Fund are urged to consult their tax advisors with specific reference to their own tax situation, including the potential application of state, local and (if applicable) foreign taxes.

VALUATION

Valuation of the Funds

Domestic equity securities listed on a U.S. or Canadian securities exchange shall be valued at the last sale price on the exchange on which the security is principally traded (the “primary exchange”) that is reported before the time when the net assets of the Funds are valued. Securities traded on more than one exchange shall be valued at the last sale price on the primary exchange. If there has been no sale on such primary exchange, then at the last sale price on the secondary exchange. If there has been no sale on the primary exchange or the secondary exchange on the valuation date, the security shall be valued at the mean of the latest bid and ask quotations as of the closing of the primary exchange. The value of securities listed on the NASDAQ Stock Market, Inc. shall generally be the NASDAQ Official Closing Price.

Generally, trading of foreign securities on most foreign markets is completed before the close in trading in U.S. markets. Additionally, trading on foreign markets may also take place on days on which the U.S. markets, and the Funds, are closed. The Funds have implemented fair value pricing on a daily basis for all non-U.S. and non-Canadian equity securities held by the Funds. The fair value pricing utilizes the quotations of an independent pricing service, unless the Adviser determines in accordance with procedures adopted by the Trustees, as discussed below that use of another fair valuation methodology is appropriate. To the extent that foreign equity securities are not fair valued utilizing quotations of an independent pricing service, such securities will be valued using the price of the last sale or official close of the primary exchange on which the security is purchased that is reported before the time when the net assets of the Funds are valued. If there has been no sale on the primary exchange on the valuation date, and the average of bid and ask quotations are less than or equal to the last sale price of local shares on the valuation date, the security shall be valued at the last sale price of the local shares. If the average of the bid and ask quotations on the primary exchange is greater than the last sale price of the local shares, the security shall be valued at the average of the closing bid and ask quotations of the foreign listed shares on the primary exchange.

For purposes of calculating net asset value (“NAV”), all assets and liabilities initially expressed in foreign currencies will be converted into U.S. dollars at the prevailing market rates.

Futures, options and other derivatives are valued on the basis of available market quotations.

Securities of other open-end investment companies are valued at their respective NAVs.

Fixed income securities with a remaining maturity of 61 days or more are valued using market quotations available from and supplied daily by third party pricing services or brokers/dealers of comparable securities. It is anticipated that such pricing services and brokers/dealers will provide bid-side quotations. Generally, short-term investments which mature in 60 days or less are valued at amortized cost if their original maturity was 60 days or less, or by amortizing their value on the 61st day prior to maturity if their original maturity when acquired by the Fund was more than 60 days.

Securities or other assets for which market quotations are not readily available or for which market quotations do not represent the value at the time of pricing (including certain illiquid securities) are fair valued in accordance with procedures established by and under the general supervision and responsibility of the Trustees. The

Board of Trustees has assigned the responsibility for valuation of portfolio securities to the Valuation Committee. The Funds’ Administrator has established a Fair Valuation Committee (“FVC”) to (1) make fair value determinations in certain pre-determined situations as outlined in the procedures approved by the Board and (2) provide recommendations to the Board’s Valuation Committee in other situations. This FVC includes senior representatives from Funds management as well as the Funds’ investment adviser. Fair value situations could include, but are not limited to: (1) a significant event that affects the value of a Fund’s securities (e.g., news relating to natural disasters affecting an issuer’s operations or earnings announcements); (2) illiquid securities; (3) securities that may be defaulted or de-listed from an exchange and are no longer trading; or (4) any other circumstance in which the FVC believes that market quotations do not accurately reflect the value of a security.

ADDITIONAL INFORMATION REGARDING THE CALCULATION OF PER SHARE NET ASSET VALUE

The net asset value of each Fund is determined as of the times specified in the Confidential Offering Memorandum. The net asset value per share of each Fund is calculated by determining the value of the securities and other assets of the Fund, less the liabilities allocable only to such Fund, and dividing such amount by the number of Shares of the Fund outstanding.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

J.P. Morgan Institutional Investments Inc. (“JPMII”) serves as the placement agent (“Placement Agent”) of the Funds’ shares pursuant to a placement agency agreement (“Placement Agency Agreement”) with the Trust, which is subject to annual approval by the Board. The Placement Agent is a subsidiary of JPMorgan Chase & Co. The Placement Agent, located at 522 Fifth Avenue, 22^nd Floor, New York, NY 10036, is a broker-dealer registered with the SEC.

Shares of the Funds may be purchased only by certain clients of JPMIM and its affiliates who maintain separately managed private accounts, and who are also “accredited investors,” as defined in Regulation D under the Securities Act. Eligible investors are institutional investors such as corporations, pension and profit sharing plans, financial institutions, endowments, and foundations. The Funds are not intended for individuals or accounts established for the benefit of individuals (other than certain pension and profit-sharing plans sponsored by employers or unions for the benefit of individual plan participants). Subscriptions may be accepted or rejected, in whole or in part, in the sole discretion of JPMIM. Shares of the Funds may also be purchased by certain investors outside of the United States consistent with applicable regulatory requirements.

Purchases-in-Kind

The Funds may, at their own option, accept securities in payment for shares. The securities delivered in such a transaction are valued in the same manner as they would be valued for purposes of computing a Fund’s NAV, as described in the section entitled “Valuation.” This is a taxable transaction to the shareholder. Purchases by means of in-kind contributions of securities will only be accepted if a variety of conditions are satisfied, including without limitation the following: (i) the securities must be traded on a public securities market or have quoted bid and asked prices available; (ii) JPMIM must determine that acceptance is in the best interest of the Fund and conforms with the applicable Fund’s fundamental objectives, policies and restrictions; and (iii) a Fund may not accept unregistered securities which, if transferred, would be required to be registered.

Redemptions-in-Kind

Subject to compliance with applicable regulations, each Fund has reserved the right to pay the redemption price of its shares, either totally or partially, by a distribution in-kind of readily marketable portfolio securities (instead of cash). The securities so distributed would be valued at the same amount as that assigned to them in calculating the NAV of the shares being sold. If a Shareholder received a distribution in-kind, the Shareholder could incur brokerage or other charges in converting the securities to cash. The Trust has not filed an election under Rule 18f-1 under the 1940 Act.

Redemptions

The Trust may suspend the right of redemption or postpone the date of payment for Shares during any period when:

(a)

trading on the New York Stock Exchange (the “EXCHANGE”) is broadly restricted by the applicable rules and regulations of the SEC;

(b)

the Exchange is closed for other than customary weekend and holiday closing;

(c)

the SEC has by order permitted such suspension; or

(d)

the SEC has declared a market emergency.

Cut-Off Times for Purchase and Redemption Orders

Orders to purchase, exchange or redeem shares received by the Funds by the cut-off times indicated in the Confidential Offering Memorandum will be processed at the NAV next calculated after the order is received by the Fund.

MANAGEMENT OF THE TRUST

The management and affairs of the Trust are supervised by the Board of Trustees under Delaware law. The Trustees and Officers of the Trust and their principal occupations during the past five years, addresses and year of birth are set forth below. Each may have held other positions with the named companies during that period. The Trust pays the fees to unaffiliated Trustees for their service as trustees. Unless otherwise noted, the business address of each Trustee and each officer is 522 Fifth Avenue, New York, New York 10036.

TRUSTEES

The Trustees of the Trust are responsible for the management and supervision of each Fund. The Trustees approve all significant agreements with those companies that furnish services to the Funds. These companies are as follows:


J.P. Morgan Investment Management Inc.		Investment Adviser
J.P. Morgan Institutional Investments Inc.		Placement Agent
JPMorgan Funds Management, Inc.		Administrator
JPMorgan Chase Bank, N.A.		Custodian, Fund Accountant, and Securities Lending Agent

The names of the Board of Trustees of the Trust, together with information regarding the year of their birth, positions with the Trust, principal occupations and other board memberships in any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the 1940 Act, are shown below. The contact address for each of the Trustees is 522 Fifth Avenue, New York, New York 10036.

The following table contains basic information regarding the Trustees that oversee operations of the Trust and other investment companies within the JPMorgan Fund Complex.


NAME (YEAR OF BIRTH); POSITIONS WITH THE FUNDS (SINCE)	PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS	NUMBER OF PORTFOLIOS/FUNDS IN JPMORGAN FUND COMPLEX ⁽¹⁾ OVERSEEN BY TRUSTEE	OTHER DIRECTORSHIPS HELD OUTSIDE JPMORGAN FUNDS COMPLEX
NON-INTERESTED TRUSTEES

Cheryl Ballenger (1956), Chairperson (since 2004) and Trustee (since 2004)	Mathematics Teacher, Vernon Hills High School (August 2004 – Present); Mathematics Teacher, Round Lake High School (2003-2004) and formerly Executive Vice President and Chief Financial Officer, Galileo International Inc. (travel technology)	13	None

Jerry B. Lewis (1939), Trustee (since 2004)	Retired; formerly President, Lewis Investments Inc. (registered investment adviser); previously, various managerial and executive positions at Ford Motor Company (Treasurer’s Office, Controller’s Office, Auditing and Corporate Strategy)	13	None

John B. Rettberg (1937), Trustee (since 2004)	Retired; formerly Corporate Vice President and Treasurer, Northrop Grumman Corporation (defense contractor)	13	None

Ken Whipple (1934), Trustee (since 2004)	Chairman (1999-Present) and CEO (1999-2004), CMS Energy	13	Director of AB Volvo and Korn Ferry International (executive recruitment)
INTERESTED TRUSTEE ⁽²⁾

John F. Ruffle (1937), Trustee (since 2005)	Retired; formerly Vice Chairman, J.P. Morgan Chase & Co. Inc. and Morgan Guaranty Trust Co. of NY	13	Director of American Shared Hospital Services an Reckson Associates Realty Co. (REIT traded on the NYSE) and American Shared Hospital Services

(1)

A Fund Complex means two or more registered investment companies that hold themselves out to investors as related companies for purposes of investment and investor services, or have a common investment adviser or have an investment adviser that is an affiliated person of the investment adviser of any of the other investment companies. The JPMorgan Fund Complex for which the Trustees serve included four trusts as of June 30, 2005.

(2)	The Board has designated Mr. Ruffle as an “interested person” at his request because he was formerly an executive officer of the parent company of the Fund’s investment adviser.

The following table shows the dollar range of each Trustee’s beneficial ownership as of December 31, 2004, in each fund, including the Funds, that the Trustee oversees and each Trustee’s aggregate ownership in any funds that the Trustee oversees in the JPMorgan Funds complex:


NAME OF TRUSTEE	DOLLAR RANGE OF EQUITY SECURITIES IN THE FUNDS	AGGREGATE DOLLAR RANGE OF EQUITY SECURITIES IN JPMORGAN FUNDS COMPLEX
Cheryl Ballenger	None	None

Jerry Lewis	None	None

John B. Rettberg	None	None

John F. Ruffle	None	None

Kenneth Whipple, Jr.	None	None

Each Trustee serves for an indefinite term, subject to the Fund’s current retirement policy, which is age 70, except Messrs. Rettberg, Ruffle and Whipple, for whom it is age 73. The Trustees decide upon general policies and are responsible for overseeing the Trust’s business affairs.

Committees of the Board

There are three standing committees of the Board: the Audit Committee, the Nominating Committee and the Valuation Committee. The duties of these Committees are described below.

Audit Committee. Each Trustee who is not an “interested person” of the Trust serves as a member of the Audit Committee. The function of the Audit Committee is to recommend independent auditors and monitor accounting and financial matters. The Audit Committee pre-approves any services to be provided by the independent auditors to the Trust. In addition, the Audit Committee considers and approves any non-audit services, and the fees to be charged for such non-audit services, to be provided by the independent auditors to any entity controlling, controlled by or under common control with JPMIM that provides ongoing services to the Trust. Pre-approval considerations include whether the proposed services are compatible with maintaining the auditor’s independence. The Audit Committee met two times during the fiscal year ended June 30, 2005.

Nominating Committee. Each Trustee who is not an “interested person” of the Trust serves as a member of the Nominating Committee. The function of the Nominating Committee is to select and nominate persons who will continue to contribute to the independence and effectiveness of the Board. The Nominating Committee will consider and evaluate candidates on the basis of the candidate’s relevant knowledge, experience, and expertise, the candidate’s ability to carry out his or her duties in the best interests of the Trust and its shareholders and the candidate’s ability to qualify as a non-interested Trustee. The Nominating Committee does not have a charter. The Nominating Committee during the fiscal year ended June 30, 2005.

Valuation Committee. Each Trustee who is not an “interested person” of the Trust serves as a member of the Valuation Committee. The function of the Valuation Committee is to oversee the implementation of the Trust’s valuation procedures and to review fair value determinations outside of regularly scheduled Board meetings. The Chairperson of the Valuation Committee, in consultation with the full Committee as the Chairperson deems appropriate, is authorized to review and approve fair value determinations. The Valuation Committee met two times during the fiscal year ended June 30, 2005.

Trustee Compensation

The aggregate amount of compensation paid to each Trustee by the Trust and JPMorgan Fund Complex for the fiscal year ending June 30, 2005 was as follows:


NAME OF TRUSTEE	TOTAL COMPENSATION FROM TRUST	TOTAL COMPENSATION FROM “FUND COMPLEX”⁽¹⁾
Cheryl Ballenger	$8,104.13	$29,583.33
Jerry Lewis	$8,104.13	$31,666.66
John B. Rettberg	$8,104.13	$29,583.33
John F. Ruffle	$8,104.13	$29,583.33
Kenneth Whipple, Jr.	$8,104.13	$29,583.33

(1)

A Fund Complex means two or more investment companies that hold themselves out to investors as related companies for purposes of investment and investment services, or have a common investment adviser or have an investment adviser that is an affiliated person of the investment adviser of any other of the investment companies. The JPMorgan Fund Complex for which the Trustees serve includes thirteen (13) funds.

Each Trustee will receive total annual compensation of $36,000 for their services as Trustees of the Trust, JPMorgan Series Trust II and JPMorgan Fleming Series Trust (collectively, “JPMorgan Funds Complex”). Fees are allocated to each trust within the JPMorgan Funds Complex pro rata, on the basis of relative net assets.

The Funds’ executive officers (listed below), other than the officers are generally employees of JPMIM or one of its affiliates.The officers conduct and supervise the business operations of the Funds. The Funds have no employees.

OFFICERS

The officers of the Funds, together with their year of birth, information regarding their positions held with the Funds, principal occupations are shown below. The contact address for each of the officers unless otherwise noted is 522 Fifth Avenue, New York, NY 10036.

NAME (YEAR OF BIRTH),

POSITIONS HELD WITH THE

FUNDS (SINCE)

PRINCIPAL OCCUPATIONS

DURING PAST 5 YEARS

George C.W. Gatch (1962), President (2004)

Managing Director of J.P. Morgan Investment Management Inc.: Director and President, JPMorgan Distribution Services, Inc. and JPMorgan Funds Management, Inc. since 2005. Mr. Gatch is CEO and President of JPMorgan Funds. Mr. Gatch has been an employee since 1986 and Mr. Gatch has held positions such as President and CEO of DKB Morgan, a Japanese mutual fund company which was a joint venture between J.P. Morgan Dai-Ichi Kangyo Bank, as well as positions in business management, marketing and sales.


NAME (YEAR OF BIRTH), POSITIONS HELD WITH THE FUNDS (SINCE)		PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS
Robert L. Young (1963), Senior Vice President (2004)*		Director and Vice Director and Vice President of JPMorgan Distribution Services, Inc. and JPMorgan Funds Management, Inc.; Chief Operating Officer, JPMorgan Funds since 2005 to present and One Group Mutual Funds from 2001 until 2005. Mr. Young is Vice President and Treasurer, JPMorgan Funds Management, Inc. (formerly One Group Administrative Services) and Vice President and Treasurer, JPMorgan Distribution Services, Inc. (formerly One Group Dealer Services, Inc.) from 1999 to 2005.

Patricia A. Maleski (1960), Vice President and Chief Administrative Officer (2004)		Vice President, JPMorgan Funds Management, Inc.; previously, Treasurer of JPMorgan Funds and Head of Funds Administration and Board Liaison. Ms. Maleski was Vice President of Finance for the Pierpont Group, Inc., an independent company owned by the Board of Directors/Trustees of the JPMorgan Funds, prior to joining JPMorgan Chase & Co. in 2001.

Stephanie J. Dorsey (1969), Treasurer*		Vice President, JPMorgan Funds Management, Inc.; Director of Mutual Fund Administration, JPMorgan Funds Management, Inc. (formerly One Group Administrative Services), from 2004 to 2005. Ms. Dorsey worked for JPMorgan Chase & Co. (formerly Bank One Corporation) from 2003 to 2004. Prior to joining Bank One Corporation, she was a Senior Manager specializing in Financial Services audits at PricewaterhouseCoopers LLP from 1992 through 2002.

Scott E. Richter (1956), Secretary and Chief Legal Officer (2004)*		From April 2005 to present, Managing Director and Associate General Counsel, JPMorgan Chase & Co. From February 2003 to April 2005, Senior Associate General Counsel, Bank One Corporation (now known as JPMorgan Chase & Co.). From November 1998 to January 2003, Deputy General Counsel, Institutional Division, INVESCO. From January 1997 to October 1998, Associate General Counsel, Piper Capital Management.

Michael L. Tucker (1954), Assistant Secretary (2004)*		First Vice President and Senior Counsel, JPMorgan Chase & Co. Member of Law Department since 1998. Mr. Tucker was an Associate from 1987-1994 and Of Counsel 1995-1998 at the law firm of Mayer, Brown, Rowe and Maw.

Susan M. Canning (1969), Assistant Secretary (2004)*		Vice President and Senior Counsel, JPMorgan Chase & Co. Member of Law Department since 1991.


NAME (YEAR OF BIRTH), POSITIONS HELD WITH THE FUNDS (SINCE)		PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS
Paul L. Gulinello (1950), AML Compliance Officer 2005		Vice President and Anti Money Laundering Compliance Officer for JPMorgan Asset Management Americas, additionally responsible for personal trading and compliance testing since 2004; Treasury Services Operating Risk Management and Compliance Executive supporting all JPMorgan Treasury Services business units from July 2000 to 2004.

Stephan M. Benham (1959), Assistant Secretary (2005)		Vice President and Assistant General Counsel, JPMorgan Chase & Co. Member of Law Department since 1991; Vice President (Legal Advisory) of Merrill Lynch Investment Managers, L.P from 2000 to 2004; attorney associated with Kirkpatrick & Lockhart LLP from 1997 to 2000.

Elizabeth A. Davin (1964), Assistant Secretary (2005)*		Vice President and Assistant General Counsel, JPMorgan Chase & Co. since 2004; Senior Counsel, JPMorgan Chase & Co. (formerly Bank One Corporation) from 2004 to 2005; Assistant General Counsel and Associated General Counsel and Vice President, Gartmore Global Investments, Inc. 1999 to 2004.

Jessica K. Ditullio (1962), Assistant Secretary (2005)*		Vice President and Assistant General Counsel, JPMorgan Chase & Co. since 2005: Ms. Ditullio has served as attorney with various titles for JPMorgan Chase & Co. (formerly Bank One Corporation) since 1990.

Nancy E. Fields (1949), Assistant Secretary (2005)*		Vice President, JPMorgan Funds Management, Inc. and JPMorgan Distribution Services, Inc. from 1999 to 2005; Director, Mutual Fund Administration, JPMorgan Funds Management, Inc. (formerly One Group Administrative Services, Inc.) and Senior Project Management, Mutual Funds, JPMorgan Distribution Services, Inc. (formerly One Group Dealer Services, Inc.).

Ellen W. O’Brien (1957), Assistant Secretary (2005)**		Assistant Vice President, JPMorgan Investor Services, co. responsible for Blue Sky registration. Ms. O’Brien has served in this capacity since joining the firm in 1991.

Suzanne E. Cioffi (1967), Assistant Treasurer (2005)		Vice President, JPMorgan Funds Management, Inc., responsible for mutual fund financial reporting. Ms. Cioffi has overseen various fund accounting, custody and administration conversion projects during the past five years.

Christopher D. Walsh (1965), Assistant Treasurer (2004)		Vice President, JPMorgan Funds Management, Inc. Mr. Walsh has managed all aspects of institutional and retail mutual fund administration and vendor relationships within the mutual funds, commingled/ERISA funds, 3(c)(7) funds, hedge funds and LLC products. Mr. Walsh was a director of Mutual Fund Administration at Prudential Investments from 1996 to 2000.

Arthur A. Jensen (1966), Assistant Secretary (2004)*		Vice President, JPMorgan Funds Management, Inc. since April 2005: formerly, Vice President, Financial Services of BISYS Fund Services, Inc. from June 2001 until 2005. Mr. Jensen was y Section Manager at Northern Trust Company and Accounting Supervisor at Allstate Insurance Company prior to 2001.

NAME (YEAR OF BIRTH),

POSITIONS HELD WITH THE

FUNDS (SINCE)

PRINCIPAL OCCUPATIONS

DURING PAST 5 YEARS

Stephen M. Ungerman (1953), Senior Vice President and Chief Compliance Officer (2004)

Senior Vice President, JPMorgan Chase & Co.; Mr. Ungerman was head of Fund Administration-Pooled Vehicles from 2000 to 2004. Mr. Ungerman held a number of positions in Prudential Financial’s asset management business prior to 2000.

*	The contact address for the officer is 1111 Polaris Parkway, Columbus, OH 43240.

**	The contact address for the officer is 73 Tremont Street, Floor 1, Boston MA 02108.

As of December 31, 2004, the officers and Trustees as a group owned less than 1% of the shares of each Fund.

BOARD REVIEW OF INVESTMENT ADVISORY ARRANGEMENTS

The Trust’s Board of Trustees, including the Board members who are not “interested persons” (as defined in the 1940 Act) of any party to the Advisory Agreement or its affiliates, has approved the Advisory Agreement for the Funds. As part of its review of the investment advisory arrangements for the Funds, the Board of Trustees has requested that the Adviser prepare on a regular basis information regarding the performance of the Funds, their performance against the Funds’ peers and benchmarks and analyses by the Adviser of the Funds’ performance. The members of the Advisers’ investment staff meet with the Board of Trustees to discuss this information and their intentions with regard to the management of the Funds. The Adviser also periodically provides comparative information regarding the Funds’ expense ratios and those of the peer groups. In addition, in preparation for its annual approval meeting, the Board of Trustees requests and reviews, with the assistance of its legal counsel, materials from the Adviser regarding comparative fees, expenses, performance and profitability information pertaining to the relationship of the Adviser and the Funds.

In approving the Advisory Agreement, the Board of Trustees of the Trust considered the nature, quality and scope of the operations and services provided by the Adviser to each Fund, including their knowledge of the Adviser’s investment staff and executive personnel and the overall reputation and capabilities of the Adviser and its affiliates. The Board of Trustees also considered comparative fee information concerning other investment companies with similar investment objectives and policies. The Trust’s Board of Trustees compared the terms of each Fund’s advisory arrangements and similar arrangements by other investment companies, particularly with regard to levels of advisory fees relative to its peer group. The Board also examined the benefits to the Adviser and its affiliates of their relationship with each Fund. Specifically, the Board analyzed the benefits that accrued to the Adviser and its affiliates as a result of the fact that affiliates of the Adviser act as custodian, administrator and shareholder servicing agent for each Fund, and receive fees from each Fund for acting in such capacities. The Board of Trustees also analyzed the information provided by the Adviser regarding the profitability to the Adviser of its relationship with the Funds. Profitability information is not audited and represents the Adviser’s determination of its and its affiliates’ revenues from the contractual services provided to the Funds, less expenses of providing such services. Expenses include direct and indirect costs and are calculated using an allocation methodology developed by the Adviser. In addition, the Board compared overall expense ratios (both pre and post expense reimbursement by the Adviser) for each Fund relative to its peer group.

In reaching their decision to approve the investment advisory arrangements, the Board of Trustees did not identify any single factor as being of paramount importance. Based on its evaluation of the information reviewed and after due consideration, the Board of Trustees of each Fund concluded that the current advisory agreement enabled the Fund to obtain high-quality services at costs that it deemed appropriate and reasonable and that approval of the agreement was in the best interest of each Fund and its shareholders.

THE ADVISER

The Trust has retained JPMIM as investment adviser to provide investment advice and portfolio management services to the Funds, pursuant to an advisory agreement (the “Advisory Agreement”). Under the Advisory Agreement, JPMIM manages the investment of the assets of each Fund and obtains and evaluates economic, statistical and financial information to formulate and implement investment policies for each Fund. Any investment program undertaken by JPMIM is and will at all times be subject to the policies and control of the Trustees. JPMIM also provides certain administrative services to each Fund.

The Advisory Agreement provides that JPMIM shall not be protected against any liability to the Funds’ shareholders by reason of willful misfeasance, bad faith or gross negligence on its part in the performance of its duties or from reckless disregard of its obligations or duties thereunder.

Effective October 1, 2003, JPMIM became a wholly-owned subsidiary of JPMorgan Asset Management Holdings, Inc., which, in turn, is a wholly owned subsidiary of JPMorgan Chase & Co. (“JPMorgan Chase”). JPMIM is a registered investment adviser under the Investment Advisers Act of 1940, as amended. JPMIM acts as investment adviser to individuals, governments, corporations, employee benefit plans, labor unions and state and local governments, mutual funds and other institutional investors. JPMIM is located at 522 Fifth Avenue, New York, NY 10036.

Effective July 1, 2004, Bank One Corporation merged with and into JPMorgan Chase & Co., a bank holding company organized under the laws of the State of Delaware. JPMorgan Chase has a long history of offering a wide range of banking and investment services to customers throughout the United States and the world. The firm, through its predecessor companies, has been in business for over a century.

The investment advisory services JPMIM provides to the Funds are not exclusive under the terms of the Advisory Agreement. JPMIM is free to and does render similar investment advisory services to others. JPMIM serves as investment adviser to personal investors and other investment companies and acts as fiduciary for trusts, estates and employee benefit plans. Investors in the Funds are required to maintain separately managed private accounts with JPMIM or its affiliates. Certain of the assets of trusts and estates under management are invested in common trust funds for which JPMIM serves as trustee. The accounts which are managed or advised by JPMIM have varying investment objectives, and JPMIM invests assets of such accounts in investments substantially similar to, or the same as, those which are expected to constitute the principal investments of the Funds. Such accounts are supervised by employees of JPMIM who may also be acting in similar capacities for the Funds. See the “Portfolio Transactions” section.

As compensation for the services rendered and related expenses such as salaries of advisory personnel borne by JPMIM under the Advisory Agreement, the Fund has agreed to pay JPMIM a fee, which is computed daily and may be paid monthly, equal to a percentage of each Fund’s average daily net assets specified in the Confidential Offering Memorandum. In the interest of limiting total expenses of the Fund, JPMIM and the Administrator have entered into an expense limitation agreement with the Trust (“Expense Limitation Agreement”), pursuant to which JPMIM and the Administrator have agreed to waive or limit their fees and to assume other expenses so that the total annual fund operating expenses (other than interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with generally accepted accounting principles, placement related expenses (if any), and other extraordinary expenses not incurred in the ordinary course of the Fund’s business) are limited to the following amounts with respect to each Fund: 0.10% of the average daily net assets of the JPMorgan Ultra Short-Term Bond Trust, JPMorgan Short-Term Bond Trust, and JPMorgan Equity Index Trust, and 0.15% of the average daily net assets of the JPMorgan Intermediate Bond Trust and JPMorgan Core Bond Trust, for the period beginning September 30, 2004 through October 31, 2006.

For the period from February 7, 2005 to June 30, 2005, the operational Funds of the Trust paid the following investment advisory fees to JPMIM and JPMIM waived investment advisory fees as follows:

ADVISORY FEES

(in 000’s)


Fund	Fiscal Year Ended June 30, 2005
Fund	Net		Waived
Core Bond Trust	$	1,295	$	1,832
Equity Index Trust	$	63	$	311
Intermediate Bond Trust	$	155	$	325

Other Accounts Managed by the Portfolio Managers of Funds as of June 30, 2005.

The following tables show information regarding other accounts managed by Portfolio managers of the Funds listed in this Offering Supplement as of June 30, 2005 (amounts in millions):


	Non-Performance Based Fee Advisory Accounts
	Registered Investment Companies		Other Pooled Investment Vehicles		Other Accounts
	Number of Accounts	Total Assets ($millions)	Number of Accounts	Total Assets ($millions)	Number of Accounts	Total Assets ($millions)
Core Bond Trust
Douglas Swanson	7	9,914.88	2	343.100	52	7,563.694
Ricardo F. Cipicchio	2	2,449.517	0	0	47	4,091.529
Equity Index Trust
Bala Iyer	2	2,089.926	0	0.000	14	198.100
Intermediate Bond Trust
Douglas Swanson	7	9,759.701	2	343.100	52	7,563.694
Scott Grimshaw	3	326.954	0	0.000	38	2,695.968
Short-Term Bond Trust
Ricardo F. Cipicchio	2	2,449.517	0	0.000	47	4,091.529
Gregg F. Hrivnak	0	0.000	0	0.000	3	39.724
Ultra Short-Term Bond Trust
Michael Sais	3	3,260.362	0	0.000	5	2,531.228
Gregg F. Hrivnak	0	0.000	0	0.000	3	39.724
Richard Figuly	1	1,971.050	0	0.000	1	66.950

	Performance Based Fee Advisory Accounts
	Registered Investment Companies		Other Pooled Investment Vehicles		Other Accounts
	Number of Accounts	Total Assets ($millions)	Number of Accounts	Total Assets ($millions)	Number of Accounts	Total Assets ($millions)
Core Bond Trust
Douglas Swanson	0	0.000	0	0.000	0	0.000
Ricardo F. Cipicchio	0	0.000	0	0.000	0	0.000
Equity Index Trust
Bala Iyer	0	0.000	0	0.000	0	0.000


Intermediate Bond Trust
Douglas Swanson	0	0.000	0	0.000	0	0.000
Scott Grimshaw	0	0.000	0	0.000	0	0.000
Short-Term Bond Trust
Ricardo F. Cipicchio	0	0.000	0	0.000	0	0.000
Gregg F. Hrivnak	0	0.000	0	0.000	0	0.000
Ultra Short-Term Bond Trust
Michael Sais	0	0.000	0	0.000	0	0.000
Gregg F. Hrivnak	0	0.000	0	0.000	0	0.000
Richard Figuly	0	0.000	0	0.000	0	0.000

Potential Conflict of Interest

The chart above shows the number, type and market value as of June 30, 2005 of the accounts other than the Fund that are managed by the Funds’ portfolio managers. The potential for conflicts of interest exists when portfolio managers manage other accounts with similar investment objectives and strategies as the Funds ("Similar Accounts"). Potential conflicts may include, for example, conflicts between investment strategies and conflicts in the allocation of investment opportunities.

Responsibility for managing JPMIM’s clients’ portfolios is organized according to investment strategies within asset classes. Generally, client portfolios with similar strategies are managed by portfolio managers in the same portfolio management group using the same objectives, approach and philosophy. Therefore, portfolio holdings, relative position sizes and industry and sector exposures tend to be similar across similar portfolios, which minimizes the potential for conflicts of interest.

JPMIM may receive more compensation with respect to certain Similar Accounts than that received with respect to the Funds or may receive compensation based in part on the performance of certain Similar Accounts. This may create a potential conflict of interest for JPMIM or its portfolio managers by providing an incentive to favor these Similar Accounts when, for example, placing securities transactions. In addition, JPMIM could be viewed as having a conflict of interest to the extent that JPMIM or an affiliate has a proprietary investment in Similar Accounts, the portfolio managers have personal investments in Similar Accounts or the Similar Accounts are investment options in JPMIM’s employee benefit plans. Potential conflicts of interest may arise with both the aggregation and allocation of securities transactions and allocation of limited investment opportunities. Allocations of aggregated trades, particularly trade orders that were only partially completed due to limited availability, and allocation of investment opportunities generally, could raise a potential conflict of interest, as JPMIM may have an incentive to allocate securities that are expected to increase in value to favored accounts. Initial public offerings, in particular, are frequently of very limited availability. JPMIM may be perceived as causing accounts it manages to participate in an offering to increase JPMIM’s overall allocation of securities in that offering. A potential conflict of interest also may be perceived to arise if transactions in one account closely follow related transactions in a different account, such as when a purchase increases the value of securities previously purchased by another account, or when a sale in one account lowers the sale price received in a sale by a second account. If JPMIM manages accounts that engage in short sales of securities of the type in which the Fund invests, JPMIM could be seen as harming the performance of the Fund for the benefit of the accounts engaging in short sales if the short sales cause the market value of the securities to fall.

JPMIM has policies and procedures designed to manage these conflicts described above such as allocation of investment opportunities to achieve fair and equitable allocation of investment opportunities among its clients over time. For example:

Orders for the same equity security are aggregated on a continual basis throughout each trading day consistent with JPMIM’s duty of best execution for its clients. If aggregated trades are fully executed, accounts participating in the trade will be allocated their pro rata share on an average price basis. Partially completed orders generally will be allocated among the participating accounts on a pro-rata average price basis, subject to certain limited exceptions. For example, accounts that would receive a de minimis allocation relative to their size may be excluded from the order. Another exception may occur when thin markets or price volatility require that an aggregated order be completed in multiple executions over several days. If partial completion of the order would result in an uneconomic

allocation to an account due to fixed transaction or custody costs, JPMIM may exclude small orders until 50% of the total order is completed. Then the small orders will be executed. Following this procedure, small orders will lag in the early execution of the order, but will be completed before completion of the total order.

Purchases of money market instruments and fixed income securities cannot always be allocated pro-rata across the accounts with the same investment strategy and objective. However, JPMIM attempts to mitigate any potential unfairness by basing non-pro rata allocations upon objective predetermined criteria for the selection of investments and a disciplined process for allocating securities with similar duration, credit quality and liquidity in the good faith judgment of JPMIM so that fair and equitable allocation will occur over time.

Portfolio Manager Compensation

JPMIM’s portfolio managers participate in a competitive compensation program that is designed to attract and retain outstanding people and closely link the performance of investment professionals to client investment objectives. The total compensation program includes a base salary fixed from year to year and a variable performance bonus consisting of cash incentives and restricted stock and, in some cases, mandatory deferred compensation. These elements reflect individual performance and the performance of JPMIM’s business as a whole.

Each portfolio manager’s performance is formally evaluated annually based on a variety of factors including the aggregate size and blended performance of the portfolios such portfolio manager manages. Individual contribution relative to client goals carries the highest impact. Portfolio manager compensation is primarily driven by meeting or exceeding clients’ risk and return objectives, relative performance to competitors or competitive indices and compliance with firm policies and regulatory requirements. In evaluating each portfolio manager’s performance with respect to the mutual funds he or she manages, the funds’ pre-tax performance is compared to the appropriate market peer group and to each fund’s benchmark index listed in the fund’s prospectus over one, three and five year periods (or such shorter time as the portfolio manager has managed the fund). Investment performance is generally more heavily weighted to the long-term.

Stock awards are granted as part of an employee’s annual performance bonus and comprise from 0% to 35% of a portfolio manager’s total award. As the level of incentive compensation increases, the percentage of compensation awarded in restricted stock also increases. Certain investment professionals may also be subject to a mandatory deferral of a portion of their compensation into proprietary mutual funds based on long-term sustained investment performance.

Investment Personnel Holdings

The following table indicates for each Fund the dollar range of shares beneficially owned by the Fund personnel identified in the Offering memorandum, as of June 30, 2005. Due to the nature of these Funds, Portfolio Managers typically will not own shares of the Funds.

Dollar Range of Shares in the Fund

Fund

Name

None

$1 -
$10,000

$10,001-
$50,000

$50,001-
$100,000

$100,001-
$500,000

$500,001-
$1,000,000

over
$1,000.000

Core Bond Trust

Douglas Swanson

Ricardo F. Cipicchio

Equity Index Trust

Michael Loeffler

Intermediate Bond Trust

Douglas Swanson

Scott Grimshaw

Short-Term Bond Trust

Ricardo F. Cipicchio

Gregg F. Hrivnak

Ultra Short-Term Bond Trust

Michael Sais

Gregg F. Hrivnak

Richard D. Figuly

CODES OF ETHICS

The Trust, JPMIM and the Placement Agent have adopted codes of ethics pursuant to Rule 17j-1 under the 1940 Act. Each of these codes permits personnel subject to such code to invest in securities, including securities that may be purchased or held by the Funds. Such purchases, however, are subject to procedures reasonably necessary to prevent access persons from engaging in any unlawful conduct set forth in Rule 17j-1.

Portfolio Transactions

Pursuant to the Advisory Agreement, JPMIM determines, subject to the general supervision of the Board of Trustees of the Trust and in accordance with each Fund’s investment objective and restrictions, which securities are to be purchased and sold by each such Fund and which brokers are to be eligible to execute its portfolio transactions. Purchases and sales of portfolio securities with respect to the Bond Funds usually are principal transactions in which portfolio securities are purchased directly from the issuer or from an underwriter or market maker for the securities. Purchases from underwriters of portfolio securities generally include a commission or concession paid by the issuer to the underwriter and purchases from dealers serving as market makers may include the spread between the bid and asked price. Transactions on stock exchanges (other than certain foreign stock exchanges) involve the payment of negotiated brokerage commissions. Transactions in the over-the-counter market are generally principal transactions with dealers. With respect to the over-the-counter market, the Trust, where possible, will deal directly with the dealers who make a market in the securities involved except in those circumstances where better price and execution are available elsewhere. While JPMIM generally seeks competitive spreads or commissions, the Trust may not necessarily pay the lowest spread or commission available on each transaction, for reasons discussed below.

Allocation of transactions, including their frequency, to various broker-dealers is determined by JPMIM, with respect to the Funds each serves, based on their best judgment and in a manner deemed fair and reasonable to Shareholders. The primary consideration is prompt execution of orders in an effective manner at the most favorable price. Subject to this consideration, in selecting broker-dealers to execute a particular transaction, and in evaluating the best overall terms available, JPMIM is authorized to consider the brokerage and research services (as those terms are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended (“1934 Act”)) provided to the Funds and/or other accounts over which JPMIM or their affiliates exercise investment discretion. JPMIM may cause a Fund to pay a broker-dealer that furnishes brokerage and research services a higher commission than that which might be charged by another broker-dealer for effecting the same transaction, provided that JPMIM, as applicable, determines in good faith that such commission is reasonable in relation to the value of the brokerage and research services provided by such broker-dealer, viewed in terms of either the particular transaction or the overall responsibilities of JPMIM to the Funds. Such brokerage and research services might consist of reports and statistics on specific companies or industries, general summaries of groups of bonds and their comparative earnings and yields, or broad overviews of the securities markets and the economy. Shareholders of the Funds should understand that the services provided by such brokers may be useful to JPMIM in connection with their services to other clients.

Supplementary research information so received is in addition to, and not in lieu of, services required to be performed by JPMIM, as the case may be, and does not reduce the advisory fees payable to JPMIM by the Funds. It is possible that certain of the supplementary research or other services received will primarily benefit one or more other investment companies or other accounts for which investment discretion is exercised. Conversely, a Fund may be the primary beneficiary of the research or services received as a result of portfolio transactions effected for such other account or investment company.

Under JPMIM’s policy, “soft dollar” services refer to arrangements which fall within the safe harbor requirements of Section 28(e) of the Securities Exchange Act, which allows JPMIM to allocate client brokerage transactions to a broker-dealer in exchange for products or services which are research-related and enhance the investment decision-making process. JPMIM considers these soft dollar services to be either (1) market data services such a Bloomberg, Reuters, of Factset; or (2) third party research and publications such as UBS providing JPMIM with Gerson Lehrman research. The Funds will not participate in JPMIM’s soft dollar arrangements described above, but may continue to allocate brokerage transactions to brokers for their proprietary research. For the fiscal year ended June 30, 2005, with respect to the Funds, JPMIM through its internal allocation procedures, allocated brokerage commissions to brokers who provided broker research including third party broker research.

The Trust will not execute portfolio transactions through, acquire portfolio securities issued by, make savings deposits in, or enter into repurchase or reverse repurchase agreements with its investment advisors or their affiliates except as may be permitted under the 1940 Act, and will not give preference to correspondents of JPMorgan Chase subsidiary banks with respect to such transactions, securities, savings deposits, repurchase agreements, and reverse repurchase agreements.

For the period from February 7, 2005 through June 30, 2005, the Funds of the Trust that paid brokerage commissions and the amounts paid for such period were as follows (amounts in thousands):

BROKERAGE COMMISSIONS


Funds	Fiscal Year Ended June 30, 2005
Core Bond Trust		N/A
Intermediate Bond Trust		N/A
Equity Index Trust	$	152,472.00

During the last fiscal year, JPMorgan Investment Advisors utilized JPMorgan Securities, Inc. (“JPMSI”) to execute portfolio transactions for the Funds.

As of June 30, 2005, certain Funds owned securities of their regular broker dealers (or parents) as shown below:


Fund	Name of Broker-Dealer	Value of Securities Owned (000’s)
Core Bond Trust	Bear Stearns Credit Suisse First Boston, Inc. Citigroup Goldman Sachs Group, Inc. Lehman Brothers Holdings, Inc. Merrill Lynch & Co., Inc. Morgan Stanley & Co. State Street Corp. Wachovia	$ $ $ $ $ $ $ $ $	7,280 9,115 12,731 11,643 3,999 9,041 12,009 1,327 9,837
Intermediate Bond Trust	Bear Stearns Charles Schwab Goldman Sachs Group, Inc. Lehman Brothers Holdings, Inc. Merrill Lynch & Co., Inc. Morgan Stanley & Co. State Street Corp. Wachovia Citigroup	$ $ $ $ $ $ $ $ $	434 472 1,654 1,008 1,908 2,109 586 2,869 8,824
Equity Index Trust	Bear Stearns Citigroup Credit Suisse First Boston, Inc. Goldman Sachs Group, Inc. Lehman Brothers Holdings, Inc. Merrill Lynch & Co., Inc. Morgan Stanley & Co. Wachovia	$ $ $ $ $ $ $ $	1,814 2,170 2,326 2,800 911 2,769 386 2,175

Investment decisions for each Fund of the Trust are made independently from those for the other Funds. Other investment companies or accounts managed by JPMIM may also invest in the same securities as the Trust. When a purchase or sale of the same security is made at substantially the same time on behalf of a given Fund and another Fund, investment company or account, the transaction will be averaged as to price, and available investments allocated as to amount, in a manner which the Adviser of the given Fund believes to be equitable to the Fund(s) and such other investment company or account. In some instances, this procedure may adversely affect the price paid or received by a Fund or the size of the position obtained by a Fund. To the extent permitted by law, JPMIM may aggregate the securities to be sold or purchased by it for a Fund with those to be sold or purchased by it for other Funds or for other investment companies or accounts in order to obtain best execution. As provided by the Investment Advisory Agreement, in making investment recommendations for the Trust, JPMIM will not inquire or take into consideration whether an issuer of securities proposed for purchase or sale by the Trust is a customer of JPMIM or their parents or subsidiaries or affiliates and, in dealing with its commercial customers, JPMIM and their respective parent, subsidiaries, and affiliates will not inquire or take into consideration whether securities of such customers are held by the Trust.

Administrator

JPMorgan Funds Management, Inc. (formerly One Group Administrative Services, Inc.), 1111 Polaris Parkway, Columbus, Ohio 43240 serves as administrator for the Trust (“JPMorgan Funds Management” or the “Administrator”) pursuant to an administration agreement (“Administration Agreement”). JPMorgan Funds Management is an affiliate of JPMIM, the Adviser of the Trust, and an indirect wholly-owned subsidiary of JPMorgan Chase.

The Administrator assists in supervising all operations of each Fund to which it serves (other than those performed under the Advisory Agreement, the Custodian Agreement and the Transfer Agency Agreement for that Fund). Under the Administration Agreement, the Administrator has agreed to maintain the necessary office space for the Funds, to price the Fund securities of each Fund it serves and compute the net asset value and net income of the Funds on a daily basis, to maintain each Fund’s financial accounts and records, and to furnish certain other services required by the Funds with respect to each Fund. The Administrator prepares annual and semi-annual reports to the SEC, prepares federal and state tax returns, and generally assists in all aspects of the Trust’s operations other than those performed under the Advisory Agreement, the Custodian Agreement and the Transfer Agency Agreement. Under the Administration Agreement, the Administrator may, at its expense, subcontract with any entity or person concerning the provision of services under the Administration Agreement.

Unless sooner terminated, the Administration Agreement between the Trust and the Administrator will continue in effect through October 31, 2006. The Administration Agreement thereafter shall be renewed automatically for successive one year terms, unless written notice not to renew is given by the non-renewing party to the other party at least 60 days prior to the expiration of the then-current term. The Administration Agreement may be terminated with respect to the Trust only upon mutual agreement of the parties to the Administration Agreement and for cause (as defined in the Administration Agreement) by the party alleging cause.

Effective July 1, 2005, J.P. Morgan Investor Services, Co (“JPMIS”) began serving as the Funds’ sub-administrator. For its services as sub-administrator, JPMIS receives a portion of the fees payable to the Administrator. Prior to July 1, 2005, BISYS Fund Services, L.P.(“BISYS”)served as the Fund’s sub-administrator. For its services as sub-administrator, BISYS received a portion of the fees payable to the Administrator.

The Administrator is entitled to a fee for its services, which is calculated daily and paid monthly, at the annual rate of ten-hundredths of one percent (.10%) of the aggregate daily net assets of all Funds.

The Trust paid fees for administrative services to JPMorgan Funds Management, Inc. as Administrator for the fiscal year ended June 30, 2005 as follows:

ADMINISTRATIVE FEES

(in thousands)


Funds	Fiscal Year Ended June 30, 2005
Funds	Net	Waived
Core Bond Trust	$1,042	$1,042
Intermediate Bond Trust	$160	$160
Equity Index Trust	$149	$149

The Administration Agreement provides that the Administrator shall not be liable for any error of judgment or mistake of law or any loss suffered by the Funds in connection with the matters to which the Administration Agreement relates, except a loss resulting from willful misfeasance, bad faith, or negligence in the performance of its duties, or from the reckless disregard by it of its obligations and duties thereunder.

Placement Agent

J.P. Morgan Institutional Investments Inc. (“JPMII”) serves as the placement agent (“Placement Agent”) of the Funds’ shares pursuant to a placement agency agreement (“Placement Agency Agreement”) with the Trust, which is subject to annual approval by the Board. The Placement Agent is a subsidiary of JPMorgan Chase & Co. The Placement Agent is located at 522 Fifth Avenue, 22^rd Floor, New York, NY 10036 is a broker-dealer and member of NASD.

The Placement Agency Agreement is terminable with respect to a Fund without penalty, at any time, by the Fund by not less than 30 days’ written notice to the Placement Agent, or by the Placement Agent upon not more than 30 days’ written notice to the Trust.

The Placement Agency Agreement will continue in effect with respect to each Fund for successive one-year periods, provided that each such continuance is specifically approved (i) by the vote of a majority of the Trustees who are not interested persons of the Trust (as defined in the 1940 Act) and who have no direct or indirect financial interest in the Placement Agency Agreement; and (ii) by the vote of a majority of the entire Board of Trustees cast in person at a meeting called for that purpose. If the Placement Agency Agreement is terminated (or not renewed) with respect to one or more Funds, it may continue in effect with respect to any Fund as to which it has not been terminated (or has been renewed).

Custodian, Transfer Agent, Accounting Agent and Dividend Disbursing Agent

Pursuant to a Global Custody Agreement with JPMorgan Chase Bank, N.A., 4 Chase MetroTech Center, Brooklyn, N.Y. 11245, JPMorgan Chase Bank, N.A. serves as the Funds’ custodian and fund accounting agent and is responsible for holding portfolio securities and cash and maintaining the books of account and records of portfolio transactions. JPMorgan Chase Bank, N.A. is an affiliate of JPMIM.

For fund accounting services, each of the Bond Funds pays to JPMorgan Chase Bank, N.A. the higher of (a) each Fund’s pro rata share of an annual complex-wide charge on the average daily net assets of all funds in an asset category as follows:

U.S. Equity Funds:

0.0085% of the first $10 billion

0.005% on the next $10 billion

0.0035% on the next $10 billion

0.0020% for such assets over $30 billion

U.S. Fixed Income Funds:

0.0090% of the first $10 billion

0.0050% on the next $10 billion

0.0035% on the next $10 billion

0.0020% for such assets over $30 billion

The minimum total annual fund accounting charge per Fund is $20,000.

For custodian services, each Fund pays to JPMorgan Chase Bank, N.A. fees of between 0.001% and 0.6% of assets under management (depending on the domicile in which the asset is held), calculated monthly in arrears, for safekeeping and fees between $7.50 and $150 for securities trades (depending on the domicile in which the trade is settled).

JPMorgan Chase Bank, N.A. is also reimbursed for its reasonable out-of-pocket or incidental expenses, including, but not limited to, legal fees.

Boston Financial Data Services, Inc. (“BFDS”) serves as Transfer Agent and Dividend Disbursing Agent for each Fund pursuant to a Transfer Agency Agreement with the Trust (the “Transfer Agency Agreement”). Under the Transfer Agency Agreement, BFDS has agreed:

(i)

to issue and redeem Shares of the Trust;

(ii)

to address and mail all communications by the Trust to its Shareholders, including reports to Shareholders, dividend and distribution notices, and proxy material for its meetings of Shareholders;

(iii)

to respond to correspondence or inquiries by Shareholders and others relating to its duties;

(iv)

to maintain Shareholder accounts and certain sub-accounts; and

(v)

to make periodic reports to the Trust’s Board of Trustees concerning the Trust’s operations.

Securities Lending Agent

On September 15, 2005, the Board of Trustees approved the appointment of JPMorgan Chase Bank, N.A. as securities lending agent for the Funds of the Trust except the Ultra Short-Term Bond Trust. Pursuant to the securities lending agreement dated as of September 26, 2005 between the Trust and JPMorgan Chase Bank,, N.A., JPMorgan Chase Bank, N.A. is entitled to a fee from the Trust, which is calculated on an annual basis and accrued daily, equal to 0.06% for all domestic loans and 0.1142% for all international loans. JPMorgan Chase Bank, N.A. has temporarily reduced fees on a voluntary basis to 0.05% for domestic loans and 0.10% for international loans. The purpose of these fees is to cover the ministerial costs of securities lending activities including securities movement, settlement of trades involving cash received as collateral, custody of collateral and marking to market loans.

ADDITIONAL INFORMATION

Proxy Voting Policies and Procedures

The Board of Trustees has delegated to the Funds’ investment adviser, JPMIM, proxy voting authority with respect to the Funds’ portfolio securities. To ensure that the proxies of portfolio companies are voted in the best interests of the Funds, the Funds’ Board of Trustees has adopted JPMIM’s detailed proxy voting procedures (the “Procedures”) that incorporate guidelines (“Guidelines”) for voting proxies on specific types of issues. The Guidelines have been developed with the objective of encouraging corporate action that enhances shareholder value. Except as noted below, proxy voting decisions will be made in accordance with the Guidelines covering a multitude of both routine and non-routine matters that JPMIM and its affiliated advisers have encountered globally, based on many years of collective investment management experience.

JPMIM and its affiliated advisers are part of a global asset management organization with the capability to invest in securities of issuers located around the globe. Because the regulatory framework and the business cultures and practices vary from region to region, the Guidelines are customized for each region to take into account such variations. Separate Guidelines cover the regions of (1) North America, (2) Europe, (3) Asia (ex-Japan) and (4) Japan, respectively. Notwithstanding the variations among the Guidelines, all of the Guidelines have been designed with the uniform objective of encouraging corporate action that enhances shareholder value. As a general rule, in voting proxies of a particular security, JPMIM will apply the Guidelines of the region in which the issuer of such security is organized. Except as noted below, proxy voting decisions will be made in accordance with the Guidelines covering a multitude of both routine and non-routine matters that JPMIM and its affiliated advisers have encountered globally, based on many years of collective investment management experience.

To oversee and monitor the proxy-voting process, JPMIM has established a proxy committee and appointed a proxy administrator in each global location where proxies are voted. The primary function of each proxy committee is to review periodically general proxy-voting matters, review and approve the Guidelines annually, and provide advice and recommendations on general proxy-voting matters as well as on specific voting issues. The procedures permit an independent voting service, currently Institutional Shareholder Services, Inc. (“ISS”) in the United States, to perform certain services otherwise carried out or coordinated by the proxy administrator.

Although for many matters the Guidelines specify the votes to be cast, for many others, the Guidelines contemplate case-by-case determinations. In addition, there will undoubtedly be proxy matters that are not contemplated by the Guidelines. For both of these categories of matters and to override the Guidelines, the Procedures require a certification and review process to be completed before the vote is cast. That process is designed to identify actual or potential material conflicts of interest (between the Fund on the one hand, and the Fund’s investment adviser, placement agent or an affiliate of any of the foregoing, on the other hand) and ensure that the proxy vote is cast in the best interests of the Fund. When a potential material conflict of interest has been identified, the proxy administrator and a subgroup of proxy committee members (composed of a member from the Investment Department and one or more members from the Legal, Compliance or Risk Management Departments) will evaluate the potential conflict of interest and determine whether such conflict actually exists, and if so, will recommend how JPMIM will vote the proxy. In addressing any material conflict, JPMIM may take one or more of the following measures (or other appropriate action): removing or “walling off” from the proxy voting process certain JPMIM personnel with knowledge of the conflict, voting in accordance with any applicable Guideline if the application of the Guideline would objectively result in the casting of a proxy vote in a predetermined manner, or deferring the vote to ISS, which will vote in accordance with its own recommendation.

The following summarizes some of the more noteworthy types of proxy voting policies of the U.S. Guidelines:

•

JPMIM considers votes on director nominees on a case-by-case basis. Votes generally will be withheld from directors who: (a) attend less than 75% of board and committee meetings without a valid excuse; (b) implement or renew a dead-hand poison pill; (c) are affiliated directors who serve on audit, compensation or nominating committees or are affiliated directors and the full board serves on such committees or the company does not have such committees; or (d) ignore a shareholder proposal that is approved for two consecutive years by a majority of either the shares outstanding or the votes cast.

•

JPMIM votes proposals to classify boards on a case-by-case basis, but will vote in favor of such proposal if the issuer’s governing documents contain each of eight enumerated safeguards (for example, a majority of the board is composed of independent directors and the nominating committee is composed solely of such directors).

•

JPMIM also considers management poison pill proposals on a case-by-case basis, looking for shareholder-friendly provisions before voting in favor.

•

JPMIM votes against proposals for a super-majority vote to approve a merger.

•

JPMI M considers proposals to increase common and/or preferred shares and to issue shares as part of a debt restructuring plan on a case-by-case basis, taking into account the extent of dilution and whether the transaction will result in a change in control.

•

JPMIM votes proposals on a stock option plan, based primarily on a detailed, quantitative analysis that takes into account factors such as estimated dilution to shareholders’ equity and dilution to voting power. JPMIM generally considers other management compensation proposals on a case-by-case basis.

•

JPMIM Advisors also considers on a case-by-case basis proposals to change an issuer’s state of incorporation, mergers and acquisitions and other corporate restructuring proposals and certain social and environmental issue proposals.

The Funds’ proxy voting records for the most recent 12-month period ended June 30 is available on the SEC’s website at www.sec.gov or by calling the following toll-free number: 1-800-343-1113.

Description of Shares

The Trust is a Delaware statutory trust. The Trust’s Declaration of Trust authorizes the Board of Trustees to establish one or more series of Shares of the Trust, and to classify or reclassify any series into one or more classes by setting or changing in any one or more respects the preferences, designations, conversion, or other rights, restrictions, or limitations as to dividends, conditions of redemption, qualifications, or other terms applicable to the Shares of such class, subject to those matters expressly provided for in the Declaration of Trust, as amended, with respect to the Shares of each series of the Trust. The Trust presently includes 5 series of Shares, which represent interests in the following:

1.	JPMorgan Core Bond Trust;

2.	JPMorgan Equity Index Trust;

3.	JPMorgan Intermediate Bond Trust;

4.	JPMorgan Short-Term Bond Trust; and

5.	JPMorgan Ultra Short-Term Bond Trust.

Shares have no subscription or preemptive rights and only such conversion or exchange rights as the Board may grant in its discretion. When issued for payment as described in the Confidential Offering Memorandum and this Supplement, the Trust’s Shares will be fully paid and non-assessable. In the event of a liquidation or dissolution of the Trust, Shares of a Fund are entitled to receive the assets available for distribution belonging to the Fund, and a proportionate distribution, based upon the relative asset values of the respective Funds, of any general assets not belonging to any particular Fund which are available for distribution.

Shareholder and Trustee Liability

The Trust’s Declaration of Trust provides that Shareholders shall not be personally liable for the debts, liabilities, obligations and expenses incurred by, contracted for, or otherwise existing with respect to, the Trust or any series or class of Shares of the Trust. Under the Declaration of Trust, neither the Trust, the Trustees, nor any officer, employee, or agent of the Trust shall have any power to bind personally any Shareholders, nor, except as specifically provided therein, to call upon any Shareholder for the payment of any sum of money or assessment whatsoever other than such as the Shareholder may at any time personally agree to pay. The Declaration of Trust grants to Shareholders the same limitation of personal liability as is extended to shareholders of a private corporation for profit incorporated in the State of Delaware.

The Trust’s Declaration of Trust states further that no Trustee of the Trust shall be personally liable to any person other than the Trust or a beneficial owner for any act, omission or obligation of the Trust or any Trustee. The Declaration of Trust also states that a Trustee shall not be liable for any act or omission or any conduct whatsoever in his capacity as Trustee, unless the Trustee would be subject to liability to the Trust or to Shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee thereunder.

Portfolio Holdings Disclosure

The Funds’ publicly available uncertified complete list of portfolio holdings information, as described above, may also be provided regularly pursuant to a standing request, such as on a monthly or quarterly basis, to (i) third party service providers, rating and ranking agencies, financial intermediaries, and affiliated persons of the Funds and (ii) clients of JPMIM or its affiliates that invest in the Funds or such clients’ consultants. No compensation or other consideration is received by the Funds or JPMIM, or any other person for these disclosures. A list of the entities that receive the Funds’ portfolio holdings information on such basis and the frequency with which it is provided to them is provided below:


Vickers Stock Research Corp.	Monthly	30 days after month end
McGraw Hill	Monthly	30 days after month end
Standard & Poor’s	Weekly	on a 3 day lag
Moody’s Investors Service, Inc.	Weekly	on a 3 day lag
Fitch Ratings	Weekly	on a 3 day lag
MorningStar Inc.	Monthly	30 days after month end
Lipper, Inc.	Monthly	30 days after month end
Thomson Financial	Monthly	30 days after month end
Bloomberg LP	Monthly	30 days after month end
Investment Company Institute	Monthly	30 days after month end

In addition, certain service providers to the Funds or JPMIM, Administrator, or the Placement Agent may for legitimate business purposes receive the Funds’ portfolio holdings information earlier than 30 days after month end, such as rating and ranking agencies, pricing services, proxy voting service providers, accountants, attorneys, custodians, securities lending agents, brokers in connection with Fund transactions and in providing price quotations, and transfer agents. These service providers include the following: The Bank of New York Company, Inc.; Bowne & Co., Inc.; Dechert LLP; R.R. Donnelley & Sons Company; FT Interactive Data; Institutional Shareholder Services, Inc.; J.J. Kenny; Morgan Stanley & Co., Incorporated; Moody’s Investors Service; and Fitch Ratings. Other service providers (e.g., the Fund’s administrator) are identified elsewhere in the registration statement. In addition, when a Fund redeems a shareholder in kind, the shareholder generally receives its proportionate share of the Fund’s portfolio holdings and, therefore, the shareholder and its agent may receive such information earlier than 30 days after month end. Such holdings are released on conditions of confidentiality, which include appropriate trading prohibitions. “Conditions of confidentiality” include confidentiality terms included in written agreements, implied by the nature of the relationship (e.g., attorney-client relationship), or required by fiduciary or regulatory principles (e.g., custody services provided by financial institutions). Disclosure of a Fund’s portfolio securities as an exception to the Fund’s normal business practice requires the business unit proposing such exception to identify a legitimate business purpose for the disclosure and submit the proposal to the Fund’s Treasurer for approval following business and compliance review. Additionally, no compensation or other consideration is received by a Fund or JPMIM, or any other person for these disclosures. The Fund’s Trustees will review annually a list of such entities that have received such information, the frequency of such disclosures and the

business purpose therefore. These procedures are designed to address conflicts of interest between the Fund’s shareholders on the one hand and JPMIM or any affiliated person of the Fund or such entities on the other hand by creating a structured review and approval process which seeks to ensure that disclosure of information about the Fund’s portfolio securities is in the best interests of the Fund’s shareholders. There can be no assurance, however that a Fund’s policies and procedures with respect to the disclosure of portfolio holdings information will prevent the misuse of such information by individuals or firms in possession of such information.

Portfolio holdings of each Fund will be disclosed on a quarterly basis on forms required to be filed with the SEC as follows: (i) portfolio holdings as of the end of each fiscal year will be filed as part of the annual report filed on Form N-CSR; (ii) portfolio holdings as of the end of the first and third fiscal quarters will be filed on Form N-Q; and (iii) portfolio holdings as of the end of the six month period will be filed as part of the semi-annual report filed on Form N-CSR. The Trust’s Form N-CSRs and Form N-Qs will be available on the SEC’s website at www.sec.gov.

Finally, the Funds release information concerning any and all portfolio holdings when required by law. Such releases may include providing information concerning holdings of a specific security to the issuer of such security.

Miscellaneous

The Trust is not required to hold a meeting of Shareholders for the purpose of electing Trustees except that (i) the Trust is required to hold a Shareholders’ meeting for the election of Trustees at such time as less than a majority of the Trustees holding office have been elected by Shareholders and (ii) if, as a result of a vacancy on the Board of Trustees, less than two-thirds of the Trustees holding office have been elected by the Shareholders, that vacancy may only be filled by a vote of the Shareholders. In addition, Trustees may be removed from office by a written consent signed by the holders of Shares representing two-thirds of the outstanding Shares of the Trust at a meeting duly called for the purpose, which meeting shall be held upon the written request of the holders of Shares representing not less than 10% of the outstanding Shares of the Trust. Except as set forth above, the Trustees may continue to hold office and may appoint successor Trustees.

As used in the Trust’s Confidential Offering Memorandum and in this Supplement, “assets belonging to a Fund” means the consideration received by the Trust upon the issuance or sale of Shares in that Fund, together with all income, earnings, profits, and proceeds derived from the investment thereof, including any proceeds from the sale, exchange, or liquidation of such investments, and any funds or payments derived from any reinvestment of such proceeds, and any general assets of the Trust not readily identified as belonging to a particular Fund that are allocated to that Fund by the Trust’s Board of Trustees. The Board of Trustees may allocate such general assets in any manner it deems fair and equitable. It is anticipated that the factor that will be used by the Board of Trustees in making allocations of general assets to particular Funds will be the relative net asset values of the respective Funds at the time of allocation. Assets belonging to a particular Fund are charged with the direct liabilities and expenses in respect of that Fund, and with a share of the general liabilities and expenses of the Trust not readily identified as belonging to a particular Fund that are allocated to that Fund in proportion to the relative net asset values of the respective Funds at the time of allocation. The timing of allocations of general assets and general liabilities and expenses of the Trust to particular Funds will be determined by the Board of Trustees of the Trust and will be in accordance with generally accepted accounting principles. Determinations by the Board of Trustees of the Trust as to the timing of the allocation of general liabilities and expenses and as to the timing and allocable portion of any general assets with respect to a particular Fund are conclusive. As used in the Confidential Offering Memorandum and in this Supplement, a “vote of a majority of the outstanding Shares” of the Trust, a particular Fund means the affirmative vote of the lesser of (a) more than 50% of the outstanding Shares of the Trust or such Fund or (b) 67% or more of the Shares of the Trust or such Fund present at a meeting at which the holders of more than 50% of the outstanding Shares of the Trust or such Fund are represented in person or by proxy.

The Trust is registered with the SEC as an open-end, management investment company. Such registration does not involve supervision by the SEC of the management or policies of the Trust.

The Confidential Offering Memorandum and this Supplement omit certain of the information contained in the Registration Statement filed with the SEC. Copies of such information may be obtained from the SEC upon payment of the prescribed fee.

The Confidential Offering Memorandum and this Supplement are not an offering of the securities herein described in any State in which such offering may not lawfully be made. No salesperson, dealer, or other person is authorized to give any information or make any representation other than those contained in the Confidential Offering Memorandum and this Supplement.

As of September 30, 2005, the following persons were the owners of more than 5% of the outstanding Shares of the following Funds. Shareholders designated by an asterisk holder 25% or more of a Fund. Such shareholders are “controlling persons” under the 1940 Act.


FUND¹	Name and Address of Shareholder	Percentage Held
CORE BOND TRUST	JPMIM AS AGENT	8.16
	FBO FIRSTENERGY
	ATTN CLIENT SERVICE MANAGER
	1111 POLARIS PKWY STE 3F
	COLUMBUS OH 43240-2050

	JPMIM AS AGENT	5.65
	FBO ROCKWELL
	ATTN CLIENT SERVICE MANAGER
	1111 POLARIS PKWY STE 3F
	COLUMBUS OH 43240-2050

	JPMIM AS AGENT FBO	6.41
	AKZO NOBEL INC MASTER TRUST
	ATTN CLIENT SERVICE MANAGER
	522 5TH AVE FL 11
	NY1-M199
	NEW YORK NY 10036-7601

	STRAFE & CO²	40.28*
	BOIA-ONE GROUP OPERATIONS
	1111 POLARIS PARKWAY
	PO BOX 711234
	COLUMBUS OH 43271-0001

EQUITY INDEX TRUST
	JPMIM AS AGENT	10.68
	FBO FIRSTENERGY
	ATTN CLIENT SERVICE MANAGER
	1111 POLARIS PKWY STE 3F
	COLUMBUS OH 43240-2050


	STRAFE & CO²	83.47*
	BOIA-ONE GROUP OPERATIONS
	1111 POLARIS PARKWAY
	PO BOX 711234
	COLUMBUS OH 43271-0001

INTERMEDIATE BOND TRUST
	JPMIM AS AGENT	16.42
	FBO BRUNSWICK
	ATTN CLIENT SERVICE MANAGER
	1111 POLARIS PKWY STE 3F
	COLUMBUS OH 43240-2050

	JPMIM AS AGENT	7.58
	FBO TEXTRON
	ATTN CLIENT SERVICE MANAGER
	1111 POLARIS PKWY STE 3F
	COLUMBUS OH 43240-2050

	JPMIM AS AGENT	7.96
	FBO UHC
	ATTN CLIENT SERVICE MANAGER
	1111 POLARIS PKWY STE 3F
	COLUMBUS OH 43240-2050

	JPMIM AS AGENT	9.52
	FBO UHHS
	ATTN CLIENT SERVICE MANAGER
	1111 POLARIS PKWY STE 3F
	COLUMBUS OH 43240-2050

	JPMIM AS AGENT FOR	13.22
	DAIRY FARMERS
	ATTN CLIENT SERVICE MANAGER
	1111 POLARIS PKWY STE 3F
	COLUMBUS OH 43240-2050

	JPMIM AS AGENT FOR	6.95
	POLYONE
	ATTN CLIENT SERVICE MANAGER
	1111 POLARIS PKWY STE 3F
	COLUMBUS OH 43240-2050


		STRAFE & CO²		29.67*
		BOIA-ONE GROUP OPERATIONS
		1111 POLARIS PARKWAY
		PO BOX 711234
		COLUMBUS OH 43271-0001

Shares of the Funds are offered only to certain clients of either JPMIM or its affiliates who maintain one or more separately managed private accounts, and who are “accredited investors,” within the meaning of Regulation D under the Securities Act. Due to JPMIM or its affiliates voting or investment power with respect to the Funds, JPMorgan Chase & Co. may be deemed to be a “controlling person” of such shares under the 1940 Act.

The shareholder of record is a subsidiary or affiliate of JPMorgan Chase & Co. (a “JPMorgan Affiliate”). Typically, the shares are held for the benefit of underlying accounts for which the JPMorgan Affiliate may have voting or investment power. To the extent that JPMorgan Affiliates own 25% or more of a class of shares of a Fund, JPMorgan Chase & Co. may be deemed to be a “controlling person” of such shares under the 1940 Act.

Financial Statements

The Financial Statements of the Trust for the fiscal year ended June 30, 2005 have been audited by PricewaterhouseCoopers LLP, independent registered public accounting firm to the Trust, as indicated in their reports with respect thereto, and are incorporated herein by reference.

APPENDIX A—DESCRIPTION OF RATINGS

The following is a summary of published ratings by major credit rating agencies. Credit ratings evaluate only the safety of principal and interest payments, not the market value risk of lower quality securities. Credit rating agencies may fail to change credit ratings to reflect subsequent events on a timely basis. Although JPMIM considers security ratings when making investment decisions, it also performs its own investment analysis and does not rely solely on the ratings assigned by credit agencies.

Unrated securities will be treated as non-investment grade securities unless JPMIM determines that such securities are the equivalent of investment grade securities. Securities that have received different ratings from more than one agency are considered investment grade if at least one agency has rated the security investment grade.

DESCRIPTION OF COMMERCIAL PAPER RATINGS

Standard & Poor’s Rating Service (“S&P Rating Service”)


A-1		Highest category of commercial paper. Capacity to meet financial commitment is strong. Obligations designated with a plus sign (+) indicate that capacity to meet financial commitment is extremely strong.

A-2		Issues somewhat more susceptible to adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the capacity to meet financial commitments is satisfactory.

A-3		Exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.

B		Regarded as having significant speculative characteristics. The obligor currently has the capacity to meet its financial commitment on the obligation; however, it faces major ongoing uncertainties which could lead to the obligor’s inadequate capacity to meet its financial commitment on the obligation.

C		Currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation.

D		In payment default. The D rating category is used when payments on an obligation are not made on the date due even if the applicable grace period has not expired, unless S&P Rating Service believes that such payments will be made during such grace period. The D rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized.

Fitch Ratings (“Fitch”)


F1		HIGHEST CREDIT QUALITY. Indicates the strongest capacity for timely payment of financial commitments; may have an added “+” to denote any exceptionally strong credit feature.

F2		GOOD CREDIT QUALITY. A satisfactory capacity for timely payment of financial commitments, but the margin of safety is not as great as in the case of the higher ratings.

F3		FAIR CREDIT QUALITY. The capacity for timely payment of financial commitments is adequate; however, near-term adverse changes could result in a reduction to non-investment grade.

B		SPECULATIVE. Minimal capacity for timely payment of financial commitments, plus vulnerability to near-term adverse changes in financial and economic conditions.

C		HIGH DEFAULT RISK. Default is a real possibility. Capacity for meeting financial commitments is solely reliant upon a sustained, favorable business and economic environment.

D		DEFAULT. Denotes actual or imminent payment default.


“+” or “–”		may be appended to ‘F-1’ rating to denote relative status within the ‘F1’ rating category.

‘NR’		indicates that Fitch does not rate the issuer or issue in question.

A-1



Moody’s Investors Service, Inc. (“Moody’s”)

Prime-1		Superior ability for repayment, often evidenced by such characteristics as: leading market positions in well-established industries; high rates of return on funds employed; conservative capitalization structure with moderate reliance on debt and ample asset protection; broad margins in earnings coverage of fixed financial charges and high internal cash generation; and well-established access to a range of financial markets and assured sources of alternate liquidity.

Prime-2		Strong capacity for repayment. This will normally be evidenced by many of the characteristics cited above but to a lesser degree. Earnings trends and coverage ratios, while sound, may be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained.

Prime-3		Acceptable capacity for repayment. The effect of industry characteristics and market compositions may be more pronounced. Variability in earnings and profitability may result in changes in the level of debt protection measurements and may require relatively high financial leverage. Adequate alternate liquidity is maintained.

Not Prime		Does not fall within any of the Prime rating categories.

Dominion Bond Rating Service Limited (“Dominion”)

R-1		Prime Credit Quality

R-2		Adequate Credit Quality

R-3		Speculative

All three Dominion rating categories for short term debt use “high”, “middle” or “low” as subset grades to designate the relative standing of the credit within a particular rating category. The following comments provide separate definitions for the three grades in the Prime Credit Quality area.


R-1 (high)		Short term debt rated “R-1 (high)” is of the highest credit quality, and indicates an entity which possesses unquestioned ability to repay current liabilities as they fall due. Entities rated in this category normally maintain strong liquidity positions, conservative debt levels and profitability which is both stable and above average. Companies achieving an “R-1 (high)” rating are normally leaders in structurally sound industry segments with proven track records, sustainable positive future results and no substantial qualifying negative factors. Given the extremely tough definition which Dominion has established for an “R-1 (high)”, few entities are strong enough to achieve this rating.

R-1 (middle)		Short term debt rated “R-1 (middle)” is of superior credit quality and, in most cases, ratings in this category differ from “R-1 (high)” credits to only a small degree. Given the extremely tough definition which Dominion has for the “R-1 (high)” category (which few companies are able to achieve), entities rated “R-1 (middle)” are also considered strong credits which typically exemplify above average strength in key areas of consideration for debt protection.

R-1 (low)		Short term debt rated “R-1” (low) is of satisfactory credit quality. The overall strength and outlook for key liquidity, debt and profitability ratios is not normally as favorable as with higher rating categories, but these considerations are still respectable. Any qualifying negative factors which exist are considered manageable, and the entity is normally of sufficient size to have some influence in its industry.

R-2 (high); R-2 (middle); R-2 (low)		Short term debt rated “R-2” is of adequate credit quality and within the three subset grades, debt protection ranges from having reasonable ability for timely repayment to a level which is considered only just adequate. The liquidity and debt ratios of entities in the “R-2” classification are not as strong as those in the “R-1” category, and the past and future trend may suggest some risk of maintaining the strength of key ratios in these areas. Alternative sources of liquidity support are considered satisfactory; however, even the strongest liquidity support will not improve the commercial paper rating of the issuer. The size of the entity may restrict its flexibility, and its relative position in the industry is not typically as strong as an “R-1 credit”. Profitability trends, past and future, may be less favorable, earnings not as stabled, and there are often negative qualifying factors present which could also make the entity more vulnerable to adverse changes in financial and economic conditions.

A-2

R-3 (high);

R-3 (middle);

R-3 (low)

Short term debt rated “R-3” is speculative, and within the three subset grades, the capacity for timely payment ranges from mildly speculative to doubtful. “R-3” credits tend to have weak liquidity and debt ratios, and the future trend of these ratios is also unclear. Due to its speculative nature, companies with “R-3” ratings would normally have very limited access to alternative sources of liquidity. Earnings would typically be very unstable, and the level of overall profitability of the entity is also likely to be low. The industry environment may be weak, and strong negative qualifying factors are also likely to be present.

A-3

DESCRIPTION OF BANK RATINGS

Moody’s


		These ratings represent Moody’s opinion of a bank’s intrinsic safety and soundness.

A		These banks possess superior intrinsic financial strength. Typically they will be major financial institutions with highly valuable and defensible business franchises, strong financial fundamentals, and a very predictable and stable operating environment.

B		These banks possess strong intrinsic financial strength. Typically, they will be institutions with valuable and defensible business franchises, good financial fundamentals, and a predictable and stable operating environment.

C		These banks possess adequate intrinsic financial strength. Typically, they will be institutions with more limited but still valuable and defensible business franchises. These banks will display either acceptable financial fundamentals within a predictable and stable operating environment, or good financial fundamentals within a less predictable and stable operating environment.

D		Banks rated D display modest intrinsic financial strength, potentially requiring some outside support at times. Such institutions may be limited by one or more of the following factors; a weak business franchise; financial fundamentals that are deficient in one or more respects; or an unpredictable and unstable operating environment.

E		Banks rated E display very modest intrinsic financial strength, with a higher likelihood of periodic outside support or an eventual need for outside assistance. Such institutions may be limited by one or more of the following factors: a weak and limited business franchise; financial fundamentals that are materially deficient in one or more respects; or a highly unpredictable or unstable operating environment.

Where appropriate, a “+” modifier will be appended to ratings below the “A” category and a “–” modifier will be appended to ratings above the “E” category to distinguish those banks that fall in intermediate categories.

DESCRIPTION OF BOND RATINGS

S&P Rating Service

Corporate and Municipal Bond Ratings

Investment Grade


AAA		Debt rated AAA has the highest rating assigned by S&P Rating Service. Capacity to pay interest and repay principal is extremely strong.

AA		Debt rated AA has a very strong capacity to pay interest and repay principal and differs from the highest rated issues only to a small degree.

A		Debt rated A has a strong capacity to pay interest and repay principal; it is somewhat more susceptible, however, to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories.

BBB		Debt rated BBB is regarded as having an adequate capacity to pay interest and repay principal. Whereas it normally exhibits adequate protection parameters, adverse economic conditions, or changing circumstances are more likely to impair the obligor’s capacity to pay interest and repay principal for debt in this category in higher-rated categories.

Speculative Grade

Debt rated BB, CCC, CC, and C is regarded as having predominantly speculative characteristics with respect to capacity to pay interest and repay principal. BB indicates the least degree of speculation and C the highest. While such debt will likely have some quality and protective characteristics, these are outweighed by large uncertainties or major exposures to adverse conditions.

A-4


BB		Debt rated BB has less near-term vulnerability to default than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to inadequate capacity to meet timely interest and principal payments. The BB rating category is also used for debt subordinated to senior debt that is assigned an actual or implied BBB- rating.

B		Debt rated B has a greater vulnerability to default but currently has the capacity to meet interest payments and principal repayments. Adverse business, financial, or economic conditions will likely impair capacity or willingness to pay interest and repay principal.

		The B rating category is also used for debt subordinated to senior debt that is assigned an actual or implied BB or BB- rating.

CCC		Debt rated CCC has a currently identifiable vulnerability to default and is dependent upon favorable business, financial, and economic conditions to meet timely payment of interest and repayment of principal. In the event of adverse business, financial or economic conditions, it is not likely to have the capacity to pay interest and repay principal. The CCC rating category is also used for debt subordinated to senior debt that is assigned an actual or implied B or B- rating.

CC		The rating CC is typically applied to debt subordinated to senior debt that is assigned an actual or implied CCC rating.

C		The rating C is typically applied to debt subordinated to senior debt that is assigned an actual or implied CCC- debt rating. The C rating may be used to cover a situation where a bankruptcy petition has been filed, but debt service payments are continued.

C1		The rating C1 is reserved for income bonds on which no interest is being paid.

D		Debt rated D is in payment default. The D rating category is used when interest payments or principal payments are not made on the date due even if the applicable grace period has not expired, unless S&P Rating Service believes that such payments will be made during such grace period. The D rating will also be used upon the filing of bankruptcy petition if debt service payments are jeopardized.

Plus(+) or Minus (-): The ratings from AA to CCC may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.

Provisional ratings: The letter “p” indicates that the rating is provisional. A provisional rating assumes the successful completion of the project being financed by the debt being rated and indicates that payment of debt service requirements is largely or entirely dependent upon the successful and timely completion of the project. This rating, however, while addressing credit quality subsequent to completion of the project, makes no comment on the likelihood of, or the risk of default upon failure of, such completion. The investor should exercise his own judgment with respect to such likelihood and risk.

r: The “r” is attached to highlight derivative, hybrid, and certain other obligations that S&P Rating Service believes may experience high volatility or high variability in expected returns due to non-credit risks. Examples of such obligations are: securities whose principal or interest return is indexed to equities, commodities, or currencies; certain swaps and options; and interest only and principal only mortgage securities.

The absence of an “r” symbol should not be taken as an indication that an obligation will exhibit no volatility or variability in total return.

N.R. Not rated.

Debt obligations of issuers outside the United States and its territories are rated on the same basis as domestic corporate and municipal issues. The ratings measure the creditworthiness of the obligor but do not take into account currency exchange and related uncertainties.

A-5

Moody’s

Long-Term Ratings: Bonds and Preferred Stock

Investment Grade


Aaa		Bonds which are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as “gilt edged.” Interest payments are protected by a large or by an exceptionally stable margin and principal is secure.

Aa		Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high-grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present that make the long-term risks appear somewhat larger than with Aaa securities.

A		Bonds which are rated A possess many favorable investment attributes and are to be considered as upper-medium-grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present that suggest a susceptibility to impairment sometime in the future.

Baa		Bonds which are rated Baa are considered as medium-grade obligations (i.e., they are neither highly protected nor poorly secured). Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well.

Non-Investment Grade


Ba		Bonds which are rated Ba are judged to have speculative elements; their future cannot be considered as well-assured. The protection of interest and principal payments may be no more than moderate and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class.

B		Bonds which are rated B generally lack characteristics of a desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small.

Caa		Bonds which are rated Caa are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest.

Ca		Bonds which are rated Ca represent obligations which are speculative in a high degree. Such issues are often in default or have other marked shortcomings.

C		Bonds which are rated C are the lowest rated class of bonds and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment.

Moody’s applies numerical modifiers, 1, 2, and 3 in each generic rating classified from Aa through Caa in its corporate bond rating system. The modifier 1 indicates that the security ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that the issue ranks in the lower end of its generic rating category.

Corporate Short-Term Debt Ratings

Moody’s short-term debt ratings are opinions of the ability of issuers to repay punctually senior debt obligations which have an original maturity not exceeding one year. Obligations relying upon support mechanisms such as letters of credit and bonds of indemnity are excluded unless explicitly rated.

A-6

Moody’s employs the following three designations, all judged to be investment grade, to indicate the relative repayment ability of rated issuers:


PRIME-1		Issuers rated Prime-1 (or supporting institutions) have a superior ability for repayment of senior short-term debt obligations. Prime-1 repayment ability will often be evidenced by many of the following characteristics: leading market positions in well-established industries; high rates of return on funds employed; conservative capitalization structure with moderate reliance on debt and ample asset protection; broad margins in earnings coverage of fixed financial charges and high internal cash generation; and well-established access to a range of financial markets and assured sources of alternate liquidity.

PRIME-2		Issuers rated Prime-2 (or supporting institutions) have a strong ability for repayment of senior short-term debt obligations. This will normally be evidenced by many of the characteristics cited above but to a lesser degree. Earnings trends and coverage ratios, while sound, may be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained.

PRIME-3		Issuers rated Prime-3 (or supporting institutions) have an acceptable ability for repayment of senior short-term obligations. The effect of industry characteristics and market compositions may be more pronounced. Variability in earnings and profitability may result in changes in the level of debt protection measurements and may require relatively high financial leverage. Adequate alternate liquidity is maintained.

NOT PRIME: Issuers rated Not Prime do not fall within any of the Prime rating categories.

Fitch

Investment Grade


AAA		HIGHEST CREDIT QUALITY. ‘AAA’ ratings denote the lowest expectation of credit risk. They are assigned only in case of exceptionally strong capacity for timely payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.

AA		VERY HIGH CREDIT QUALITY. ‘AA’ ratings denote a very low expectation of credit risk. They indicate very strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events.

A		HIGH CREDIT QUALITY. ‘A’ ratings denote a low expectation of credit risk. The capacity for timely payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to changes in circumstances or in economic conditions than is the case for higher ratings.

BBB		GOOD CREDIT QUALITY. ‘BBB’ ratings indicate that there is currently a low expectation of credit risk. The capacity for timely payment of financial commitments is considered adequate, but adverse changes in circumstances and in economic conditions are more likely to impair this capacity. This is the lowest investment-grade category.

Speculative Grade


BB		SPECULATIVE. ‘BB’ ratings indicate that there is a possibility of credit risk developing, particularly as the result of adverse economic change over time; however, business or financial alternatives may be available to allow financial commitments to be met. Securities rated in this category are not investment grade.

B		HIGHLY SPECULATIVE. ‘B’ ratings indicate that significant credit risk is present, but a limited margin of safety remains. Financial commitments are currently being met: however, capacity for continued payment is contingent upon a sustained, favorable business and economic environment.

CCC, CC, C		HIGH DEFAULT RISK. Default is a real possibility. Capacity for meeting financial commitments is solely reliant upon sustained, favorable business or economic developments. A ‘CC’ rating indicates that default of some kind appears probable. ‘C’ ratings signal imminent default.

A-7

DDD,

DD,

DEFAULT. The ratings of obligations in this category are based on their prospects for achieving partial or full recovery in a reorganization or liquidation of the obligor. While expected recovery values are highly speculative and cannot be estimated with any precision, the following serve as general guidelines. ‘DDD’ obligations have the highest potential for recovery, around 90%-100% of outstanding amounts and accrued interest. ‘DD’ indicates potential recoveries in the range of 50%-90% and ‘D’ the lowest recovery potential, i.e., below 50%.

Dominion

Bond and Long-Term Debt Rating Scale


AAA		Bonds rated “AAA” are of the highest credit quality, with exceptionally strong protection for the timely repayment of principal and interest. Earnings are considered stable, the structure of the industry in which the entity operates is strong, and the outlook for future profitability is favorable. There are few qualifying factors present which would detract from the performance of the entity, the strength of liquidity and coverage ratios is unquestioned and the entity has established a creditable track record of superior performance. Given the extremely tough definition which Dominion has established for this category, few entities are able to achieve a AAA rating.

AA		Bonds rate “AA” are of superior credit quality, and protection of interest and principal is considered high. In many cases, they differ from bonds rated AAA only to a small degree. Given the extremely tough definition which Dominion has for the AAA category (which few companies are able to achieve), entities rated AA are also considered to be strong credits which typically exemplify above-average strength in key areas of consideration and are unlikely to be significantly affected by reasonably foreseeable events.

A		Bonds rated “A” are of satisfactory credit quality. Protection of interest and principal is still substantial, but the degree of strength is less than with AA rated entities. While a respectable rating, entities in the “A” category are considered to be more susceptible to adverse economic conditions and have greater cyclical tendencies than higher rated companies.

BBB		Bonds rated “BBB” are of adequate credit quality. Protection of interest and principal is considered adequate, but the entity is more susceptible to adverse changes in financial and economic conditions, or there may be other adversities present which reduce the strength of the entity and its rated securities.

BB		Bonds rated “BB” are defined to be speculative, where the degree of protection afforded interest and principal is uncertain, particularly during periods of economic recession. Entities in the BB area typically have limited access to capital markets and additional liquidity support and, in many cases, small size or lack of competitive strength may be additional negative considerations.

B		Bonds rated “B” are highly speculative and there is a reasonably high level of uncertainty which exists as to the ability of the entity to pay interest and principal on a continuing basis in the future, especially in periods of economic recession or industry adversity.

CCC/ CC/ C		Bonds rated in any of these categories are very highly speculative and are in danger of default of interest and principal. The degree of adverse elements present is more severe than bonds rated “B”, Bonds rated below “B” often have characteristics which, if not remedied, may lead to default. In practice, there is little difference between the “C” to “CCC” categories, with “CC” and “C” normally used to lower ranking debt of companies where the senior debt is rated in the “CCC” to “B” range.

D		This category indicates Bonds in default of either interest or principal.

(“high,” “low”) grades are used to indicate the relative standing of a credit within a particular rating category. The lack of one of these designations indicates a rating which is essentially in the middle of the category. Note that “high” and “low” grades are not used for the AAA category.

A-8

DESCRIPTION OF INSURANCE RATINGS

Moody’s

Insurance Financial Strength Ratings

These ratings represent Moody’s opinions of the ability of insurance companies to pay punctually senior policyholder claims and obligations.


Aaa		Insurance companies rated in this category offer exceptional financial security. While the credit profile of these companies is likely to change, such changes as can be visualized are most unlikely to impair their fundamentally strong position.

Aa		These insurance companies offer excellent financial security. Together with the Aaa group, they constitute what are generally known as high grade companies. They are rated lower than Aaa companies because long-term risks appear somewhat larger.

A		Insurance companies rated in this category offer good financial security. However, elements may be present which suggest a susceptibility to impairment sometime in the future.

Baa		Insurance companies rated in this category offer adequate financial security. However, certain protective elements may be lacking or may be characteristically unreliable over any great length of time.

Ba		Insurance companies rated in this category offer questionable financial security. Often the ability of these companies to meet policyholder obligations may be very moderate and thereby not well safeguarded in the future.

B		Insurance companies rated in this category offer poor financial security. Assurance of punctual payment of policyholder obligations over any long period of time is small.

Caa		Insurance companies rated in this category offer very poor financial security. They may be in default on their policyholder obligations or there may be present elements of danger with respect to punctual payment of policyholder obligations and claims.

Ca		Insurance companies rated in this category offer extremely poor financial security. Such companies are often in default on their policyholder obligations or have other marked shortcomings.

C		Insurance companies rated in this category are the lowest rated class of insurance company and can be regarded as having extremely poor prospects of ever offering financial security.

Short-Term Insurance Financial Strength Ratings

These ratings represents Moody’s opinions of the ability of the insurance company to repay punctually its short-term senior policyholder claims and obligations. The ratings apply to senior policyholder obligations that mature or are payable within one year or less.

Specific obligations are considered unrated unless individually rated because the standing of a particular insurance obligation would depend on an assessment of its relative standing under those laws governing both the obligation and the insurance company.


P-1		Insurers (or supporting institutions) rated Prime-1 have a superior ability for repayment of senior short-term policyholder claims and obligations.

P-2		Insurers (or supporting institutions) rated Prime-2 have a strong ability for repayment of senior short-term policyholder claims and obligations.

P-3		Insurers (or supporting institutions) rated Prime-3 have an acceptable ability for repayment of senior short-term policyholder claims and obligations.

NP		Insurers (or supporting institutions) rated Not Prime (NP) do not fall within any of the Prime rating categories.

A-9

S&P Rating Service

An insurer rated “BBB” or higher is regarded as having financial security characteristics that outweigh any vulnerabilities, and is highly likely to have the ability to meet financial commitments.


AAA		Extremely Strong financial security characteristics. “AAA” is the highest Insurer Financial Strength Rating assigned by S&P Rating Service.

AA		Very Strong financial security characteristics, differing only slightly from those rated higher.

A		Strong financial security characteristics, but is somewhat more likely to be affected by adverse business conditions than are insurers with higher ratings.

BBB		Good financial security characteristics, but is more likely to be affected by adverse business conditions than are higher rated insurers.

An insurer rated “BB” or lower is regarded as having vulnerable characteristics that may outweigh its strengths. “BB” indicates the least degree of vulnerability within the range; “CC” the highest.


BB		Marginal financial security characteristics. Positive attributes exist, but adverse business conditions could lead to insufficient ability to meet financial commitments.

B		Weak financial security characteristics. Adverse business conditions will likely impair its ability to meet financial commitments.

CCC		Very Weak financial security characteristics, and is dependent on favorable business conditions to meet financial commitments.

CC		Extremely Weak financial security characteristics and is likely not to meet some of its financial commitments.

R		An insurer rated R is under regulatory supervision owing to its financial condition. During the pendency of the regulatory supervision, the regulators may have the power to favor one class of obligations over others or pay some obligations and not others. The rating does not apply to insurers subject only to nonfinancial actions such as market conduct violations.

NR		Not Rated, which implies no opinion about the insurer’s financial security.

Plus (+) or minus (–) following ratings from “AA” to “CCC” show relative standing within the major rating categories.

Fitch

Insurer Financial Strength Ratings

A Fitch insurer financial strength rating (“IFS rating”) provides an assessment of the financial strength of an insurance organization, and its capacity to meet senior obligations to policyholders and contractholders on a timely basis. The IFS rating is assigned to the insurance organization itself, and no liabilities or obligations of the insurer are specifically rated unless otherwise stated (for example, Fitch may separately rate the debt obligations of an insurer). The IFS rating can be assigned to insurance and reinsurance companies in all insurance sectors, including the life & health, property & casualty, mortgage, financial guaranty and title insurance sectors, as well as managed care companies such as health maintenance organizations.

The IFS rating uses the same ratings scale and symbols used by Fitch for its international ratings of long-term debt obligations and issuers. However, the definitions associated with the ratings reflect the unique aspects of the IFS rating within an insurance industry context. Ratings in the ‘AA’ through ‘CCC’ categories may be amended with a plus or minus sign to show relative standing within the major rating category. Ratings of ‘BBB–’ and higher are considered to be “Secure”, and those of ‘BB+’ and lower are considered to be “Vulnerable”.

A-10


AAA		EXCEPTIONALLY STRONG. Companies assigned this highest rating are viewed as possessing exceptionally strong capacity to meet policyholder and contract obligations. For such companies, risk factors are minimal and the impact of any adverse business and economic factors is expected to be extremely small.

AA		VERY STRONG. Companies are viewed as possessing very strong capacity to meet policyholder and contract obligations. Risk factors are modest, and the impact of any adverse business and economic factors is expected to be very small.

A		STRONG. Companies are viewed as possessing strong capacity to meet policyholder and contract obligations. Risk factors are moderate, and the impact of any adverse business and economic factors is expected to be small.

BBB		GOOD. Companies are viewed as possessing good capacity to meet policyholder and contract obligations. Risk factors are somewhat high, and the impact of any adverse business and economic factors is expected to be material, yet manageable.

BB		Moderately Weak. Companies are viewed as moderately weak with an uncertain capacity to meet policyholder and contract obligations. Though positive factors are present, overall risk factors are high, and the impact of any adverse business and economic factors is expected to be significant.

B		Weak. Companies are viewed as weak with a poor capacity to meet policyholder and contract obligations. Risk factors are very high, and the impact of any adverse business and economic factors is expected to be very significant.

CCC, CC, C		Very Weak. Companies rated in any of these three categories are viewed as very weak with a very poor capacity to meet policyholder and contract obligations. Risk factors are extremely high, and the impact of any adverse business and economic factors is expected to be insurmountable. A ‘CC’ rating indicates that some form of insolvency or liquidity impairment appears probable. A ‘C’ rating signals that insolvency or a liquidity impairment appears imminent.

DDD, DD, D		Distressed. These ratings are assigned to companies that have either failed to make payments on their obligations in a timely manner, are deemed to be insolvent, or have been subjected to some form of regulatory intervention. Within the ‘DDD’-’D’ range, those companies rated ‘DDD’ have the highest prospects for resumption of business operations or, if liquidated or wound down, of having a vast majority of their obligations to policyholders and contractholders ultimately paid off, though on a delayed basis (with recoveries expected in the range of 90-100%). Those rated ‘DD’ show a much lower likelihood of ultimately paying off material amounts of their obligations in a liquidation or wind down scenario (in a range of 50-90%). Those rated ‘D’ are ultimately expected to have very limited liquid assets available to fund obligations, and therefore any ultimate payoffs would be quite modest (at under 50%).

Short-Term Insurer Financial Strength Ratings

Fitch will only assign a ST-IFS rating to insurers that also have been assigned an IFS rating. Currently, ST-IFS ratings are used primarily by U.S. life insurance companies that sell short-term funding agreements.

The ST-IFS rating uses the same international ratings scale used by Fitch for short-term debt and issuer ratings. Ratings of ‘F1’, ‘F2’ and ‘F3’ are considered to be “Secure”, while those of ‘B’ and below are viewed as “Vulnerable”.


F1		STRONG. Insurers are viewed as having a strong capacity to meet their near-term obligations. When an insurer rated in this rating category is designated with a (+) sign, it is viewed as having a very strong capacity to meet near-term obligations.

F2		MODERATELY STRONG. Insurers are viewed as having a moderately strong capacity to meet their near-term obligations.

F3		MODERATE. Insurers are viewed as having a moderate capacity to meet their near-term obligations, and a near-term adverse change in business or economic factors would likely move the insurer to a ‘vulnerable’ rating category.

A-11


B		WEAK. Insurers are viewed as having a weak capacity to meet their near-term obligations.

C		VERY WEAK. Insurers are viewed as having a very weak capacity to meet their near-term obligations.

D		DISTRESSED. Insurers have either been unable to meet near-term obligations, or the failure to meet such obligations is imminent.

DESCRIPTION OF SHORT-TERM MUNICIPAL BOND RATINGS

Moody’s

Moody’s ratings for short-term municipal obligations are designated “Moody’s Investment Grade (“MIG”) or “Variable Moody’s Investment Grade” (“VMIG”), in the case of variable rate demand obligations (VRDOs). For VRDOs, a two-component rating is assigned. The first element represents an evaluation of the degree of risk associated with scheduled principal and interest payments, and the other represents an evaluation of the degree of risk associated with the demand feature. The short-term rating assigned to the demand feature of VRDOs is designated as VMIG. When either the long- or short-term aspect of a VRDO is not rated, that piece is designated NR, e.g., Aaa/NR or NR/VMIG 1. MIG ratings terminate at the retirement of the obligation while VMIG rating expiration will be a function of each issue’s specific structural or credit features. Those short-term obligations that are of speculative quality are designated SG.


MIG1/VMIG1		Superior credit quality. Excellent protection is afforded by established cash flows, highly reliable liquidity support or demonstrated broad-based access to the market for refinancing.

MIG2/VMIG2		Strong credit quality. Margins of protection are ample although not so large as in the preceding group.

MIG3/VMIG3		Acceptable credit quality. Liquidity and cash flow protection may be narrow and marketing access for refinancing is likely to be less well established.

SG		Speculative quality. Debt instruments in this category lack margins of protection.

S&P Rating Service

An S&P Rating Service note rating reflects the liquidity concerns and market access risks unique to notes. Notes due in three years or less will likely receive a note rating. Notes maturing beyond three years will most likely receive a long-term debt rating.


SP-1		Strong capacity to pay principal and interest. Those issues determined to possess overwhelming safety characteristics will be given a plus (+) designation.

SP-2		Satisfactory capacity to pay principal and interest.

SP-3		Speculative capacity to pay principal and interest.

DESCRIPTION OF PREFERRED STOCK RATINGS

Moody’s


aaa		Top-quality preferred stock. This rating indicates good asset protection and the least risk of dividend impairment within the universe of preferred stocks.

aa		High-grade preferred stock. This rating indicates that there is a reasonable assurance the earnings and asset protection will remain relatively well maintained in the foreseeable future.

a		Upper-medium grade preferred stock. While risks are judged to be somewhat greater than in the “aaa” and “aa” classifications, earnings and asset protection are, nevertheless, expected to be maintained at adequate levels.

baa		Medium-grade preferred stock, neither highly protected nor poorly secured. Earnings and asset protection appear adequate at present but may be questionable over any great length of time.

A-12


ba		Considered to have speculative elements and its future cannot be considered well assured. Earnings and asset protection may be very moderate and not well safeguarded during adverse periods. Uncertainty of position characterizes preferred stocks in this class.

b		Lacks the characteristics of a desirable investment. Assurance of dividend payments and maintenance of other terms of the issue over any long period of time may be small.

caa		Likely to be in arrears on dividend payments. This rating designation does not purport to indicate the future status of payments.

ca		Speculative in a high degree and is likely to be in arrears on dividends with little likelihood of eventual payments.

c		Lowest rated class of preferred or preference stock. Issues so rated can thus be regarded as having extremely poor prospects of ever attaining any real investment standing.

Note: Moody’s applies numerical modifiers 1, 2, and 3 in each rating classification; the modifier 1 indicates that the security ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking and the modifier 3 indicates that the issue ranks in the lower end of its generic rating category.

Dominion

Preferred Share Rating Scale


Pfd-1		Preferred shares rated “Pfd-1” are of superior credit quality, and are supported by entities with strong earnings and balance sheet characteristics. “Pfd-1” generally corresponds with companies whose senior bonds are rated in the “AAA” or “AA” categories. As is the case with all rating categories, the relationship between senior debt ratings and preferred share ratings should be understood as one where the senior debt rating effectively sets a ceiling for the preferred shares issued by the entity. However, there are cases where the preferred share rating could be lower than the normal relationship with the issuer’s senior debt rating.

Pfd-2		Preferred shares rated “Pfd-2” are of satisfactory credit quality. Protection of dividends and principal is still substantial, but earnings, the balance sheet, and coverage ratios are not as strong as Pfd-1 rated companies. Generally, “Pfd-2” ratings correspond with companies whose senior bonds are rated in the “A” category.

Pfd-3		Preferred shares rated “Pfd-3” are of adequate credit quality. While protection of dividends and principal is still considered acceptable, the issuing entity is more susceptible to adverse changes in financial and economic conditions, and there may be other adversities present which detract from debt protection. “Pfd-3” ratings generally correspond with companies whose senior bonds are rated in the higher end of the “BBB” category.

Pfd-4		Preferred shares rated “Pfd-4” are speculative, where the degree of protection afforded to dividends and principal is uncertain, particularly during periods of economic adversity. Companies with preferred shares rated “Pfd-4” generally coincide with entities that have senior bond ratings ranging from the lower end of the “BBB” category through the “BB” category.

Pfd-5		Preferred shares rated “Pfd-5” are highly speculative and the ability of the entity to maintain timely dividend and principal payments in the future is highly uncertain. The “Pfd-5” rating generally coincides with companies with senior bond ratings of “B” or lower. Preferred shares rated “Pfd-5” often have characteristics which, if not remedied, may lead to default.

“D”		This category indicates preferred shares that are in arrears of paying either dividends or principal.

(“high”, “low”) grades are used to indicate the relative standing of a credit within a particular rating category. The lack of one of these designations indicate a rating that is essentially in the middle of the category. In order to alert subscribers to the fact that in a default situation there is a potentially higher risk of loss with a non-cumulative security, Dominion uses the “n” designation. This method essentially alerts subscribers to the potential risk that would arise in a default scenario without penalizing the base rating, where the key focus is to measure credit risk and the likelihood of default. Dominion has chosen to provide the same type of alert for hybrid instruments using the “y” designation.

A-13

TOG- S - SAI - 11/05

PART C: OTHER INFORMATION

Item 23. Exhibits

Exhibits filed pursuant to Form N-1A:

(a) (1) #9; Certificate of Trust is incorporated by reference to Registrant’s Initial Registration Statement on Form N-1A, SEC File No. 811-21638.

(2) Declaration of Trust is incorporated by reference to Registrant’s Initial Registration Statement on Form N-1A, SEC File No. 811-21638.

(b) By-Laws is incorporated by reference to Registrant’s Initial Registration Statement on Form N-1A, SEC File No. 811-21638.

(d) Investment Advisory Agreement between the Registrant and J.P. Morgan Investment Management Inc is filed herewith.

(e) Not applicable.

(f) Not applicable.

(g) Global Custody and Fund Accounting Agreement with JPMorgan Chase Bank is filed herewith.

(h) (1) Transfer Agency Agreement between the Registrant and Boston Data Services, Inc. is filed herewith.

(2) Form of Administration Agreement between the Registrant and JPMorgan Funds Management, Inc. (formerly known as One Group Administrative Services, Inc.) is filed herewith.

(3) Placement Agency Agreement between the Registrant and J.P. Morgan Institutional Investments Inc. is filed herewith.

(4) Securities Lending Agreement between Registrant and JPMorgan Chase Bank, NA is filed herewith.

(i) Not applicable.

(j) Not applicable.

(k) Not applicable.

(l) Not applicable.

(m) Not applicable.

(n) Not applicable.

(o) Reserved.

(p) Codes of Ethics.

(1) Code of Ethics of The J.P. Morgan Family of Funds. Incorporated herein by reference to Post-Effective Amendment No. 18 to the Registration Statement of JP Morgan Series Trust II (CIK 0000916118) filed on February 13, 2004 (Accession Number 0001047469-04-00425).

(2) Code of Ethics of Adviser. Incorporated herein by reference to Post-Effective Amendment No. 18 to the Registration Statement of JP Morgan Series Trust II (CIK 0000916118) filed on February 13, 2004 (Accession Number 0001047469-04-00425).

Item 24. Persons Controlled by or Under Common Control with the Registrant

The Registrant is not directly or indirectly controlled by or under common control with any person other than the Trustees. It does not have any subsidiaries.

Item 25. Indemnification

Article VII, Section 3 of the Trust’s Declaration of Trust provides that, subject to the exceptions and limitations contained in the Trust’s By-Laws: (a) every person who is, has been, or becomes a Trustee or officer of the Trust (hereinafter referred to as a “Covered Person”) shall be indemnified by the Trust to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid by him in connection with any proceeding in which he becomes involved as a party or otherwise by virtue of his being or having been a Trustee or officer of the Trust and against amounts paid or incurred by him in the settlement thereof; and (ii) expenses in connection with the defense of any proceeding of the character described in clause (i) above shall be advanced by the Trust to the Covered Person from time to time prior to final disposition of such proceeding to the fullest extent permitted by law.

Article VII, Section 2 of the Trust’s By-Laws provides that subject to the exceptions and limitations contained in Article VII, Section 4 of the By-Laws the Trust shall indemnify its Covered Persons to the fullest extent consistent with state law and the Investment Company Act of 1940, as amended (“1940 Act”). Without limitation of the foregoing, the Trust shall indemnify each person who was or is a party or is threatened to be made a party to any proceedings, by reason of alleged acts or omissions within the scope of his or her service as a Trustee or officer of the Trust, against judgments, fines, penalties, settlements and reasonable expenses (including attorneys’ fees) actually incurred by him or her in connection with such proceeding to the maximum extent consistent with state law and the 1940 Act. Subject to the exceptions and limitations contained in Section 4 of Article VII of the By-Laws, the Trust may, to the fullest extent consistent with law, indemnify each person who is serving or has served at the request of the Trust as a director, officer, partner, trustee, employee, agent or fiduciary of another domestic or foreign corporation, partnership, joint venture, trust, other enterprise or employee benefit plan (“Other Position”) and who was or is a party or is threatened to be made a party to any proceeding by reason of alleged acts or omissions while acting within the scope of his or her service in such Other Position, against judgments, fines, settlements and reasonable expenses (including attorneys’ fees) actually incurred by him or her in connection with such proceeding to the maximum extent consistent with state law and the 1940 Act. The indemnification and other rights provided by Article VII of the By-Laws shall continue as to a person who has ceased to be a Trustee or officer of the Trust.

Article VII, Section 4 of the Trust’s By-Laws provides that: (a) the Trust shall not indemnify a Covered Person or agent who shall have been adjudicated by a court or body before which the proceeding was brought (i) to be liable to the Trust or its Shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office (collectively, “disabling conduct”) or (ii) not to have acted in good faith in the reasonable belief that his action was in or not opposed to the best interest of the Trust; and (b) the Trust shall not indemnify a Covered Person or agent unless the court or other body before which the proceeding was brought determines that such Trustee, officer or agent did not engage in disabling conduct or, with respect to any proceeding disposed of (whether by settlement, pursuant to a consent decree or otherwise) without an adjudication by the court or other body before which the proceeding was brought, there has been a dismissal of the proceeding by the court or other body before which it was brought for insufficiency of evidence of any disabling conduct with which such a Covered Person or agent has been charged and a determination that such Trustee, officer or agent did not engage in disabling conduct by at least a majority of those Trustees who are neither interested persons of the Trust (as that term is defined in Section 2(a)(19) of the 1940 Act) nor parties to the proceeding based upon a review of readily available facts (as opposed to a full trial-type inquiry).

Item 26. Business and Other Connections of the Investment Adviser

See “Management of the Trust” in Part B. Information as to the directors and officers of the Adviser is included in its Form ADV filed with the SEC and is incorporated herein by reference.

Item 27. Principal Underwriter

Not applicable.

Item 28. Location of Accounts and Records

All accounts, books, records and documents required pursuant to Section 31(a) of the Investment Company Act of 1940, as amended, and the rules promulgated thereunder are maintained in the physical possession of: One Group Administrative Services, Inc., the Registrant’s administrator, at 1111 Polaris Parkway, Columbus, Ohio 43240; JPMorgan Chase Bank, the Registrant’s custodian at 4 Chase MetroTech Center, Brooklyn, N.Y. 11245; J.P. Morgan Investment Management Inc., the Registrant’s investment adviser, at 522 Fifth Avenue, New York, NY 10036; Boston Financial Data Services, Inc., the Registrant’s transfer agent, at 2 Heritage Drive, North Quincy, Massachusetts 02171.

Item 29. Management Services

None.

Item 30. Undertakings

Not applicable.

SIGNATURE

Pursuant to the requirements of the Investment Company Act of 1940, as amended, the Registrant, JPMorgan Institutional Trust, has duly caused this registration statement to be signed on its behalf by the undersigned, duly authorized, in the City of Columbus, and State of Ohio on the 28^th day of October, 2005.


JPMorgan Institutional Trust

By:		/s/ Scott E. Richter
		Scott E. Richter Secretary and Chief Legal Officer


Exhibits

(d)		Investment Advisory Agreement between the Registrant and J.P. Morgan Investment Management Inc.

(g)		Global Custody and Fund Accounting Agreement with JPMorgan Chase Bank.

(h)(1)		Transfer Agency Agreement between the Registrant and Boston Financial Data Services, Inc.

(h)(2)		Form of Administration Agreement between the Registrant and JPMorgan Funds Management, Inc.

(h)(3)		Placement Agency Agreement between the Registrant and J.P. Morgan Institutional Investments Inc.

(h)(4)		Securities Lending Agreement between the Registrant and JPMorgan Chase Bank, NA.

EX-99.D 2 dex99d.htm INVESTMENT ADVISORY AGREEMENT Investment Advisory Agreement

Exhibit (d)

JPMORGAN INSTITUTIONAL TRUST

INVESTMENT ADVISORY AGREEMENT

AGREEMENT, made this 4th day of February, 2005, between JPMorgan Institutional Trust, a statutory trust organized under the laws of the State of Delaware (the “Trust”) and J.P. Morgan Investment Management Inc., a Delaware corporation (the “Advisor”).

WHEREAS, the Trust is an open-end management investment company of the series type registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended (the “1940 Act”); and

WHEREAS, the Trust desires to retain the Advisor to render investment advisory services to the series of the Trust set forth in Schedule A (each, a “Portfolio”) as agreed to from time to time between the Trust and the Advisor, and;

WHEREAS, the Advisor is willing to render such services; and

NOW, THEREFORE, this Agreement

W I T N E S S E T H:

that in consideration of the premises and mutual promises hereinafter set forth, the parties hereto agree as follows:

1. The Trust hereby appoints the Advisor to act as investment adviser to the Portfolios for the period and on the terms set forth in this Agreement. The Advisor accepts such appointment and agrees to render the services herein set forth, for the compensation herein provided.

2. Subject to the general supervision of the Trustees of the Trust, the Advisor shall manage the investment operations of each Portfolio and the composition of the Portfolio’s holdings of securities and investments, including cash, the purchase, retention and disposition thereof and agreements relating thereto, in accordance with the Portfolio’s investment objectives and policies as stated in the Trust’s registration statement on Form N-1A, as such may be amended from time to time (the “Registration Statement”), with respect to the Portfolio, under the Investment Company Act of 1940, as amended (the “1940 Act”), and subject to the following understandings:

(a) the Advisor shall furnish a continuous investment program for each Portfolio and determine from time to time what investments or securities will be purchased, retained, sold or lent by the Portfolio, and what portion of the assets will be invested or held uninvested as cash;

(b) the Advisor shall use the same skill and care in the management of each Portfolio’s investments as it uses in the administration of other accounts for which it has investment responsibility as agent;

(c) the Advisor, in the performance of its duties and obligations under this Agreement, shall act in conformity with the Trust’s Declaration of Trust (such Declaration of Trust, as currently in effect and as amended from time to time, is herein called the “Declaration of Trust”), the Trust’s By-Laws (such By-Laws, as presently in effect and as amended from time to time, are herein called the “By-Laws”) and the Registration Statement and with the instructions and directions of the Trustees of the Trust and will conform to and comply with the requirements of the 1940 Act and all other applicable federal and state laws and regulations;

(d) the Advisor shall determine the securities to be purchased, sold or lent by each Portfolio and as agent for the Portfolio will effect portfolio transactions pursuant to its determinations either directly with the issuer or with any broker and/or dealer in such securities; in placing orders with brokers and/or dealers the Advisor intends to seek best price and execution for purchases and sales; the Advisor shall also determine whether the Portfolio shall enter into repurchase or reverse repurchase agreements;

On occasions when the Advisor deems the purchase or sale of a security to be in the best interest of one of the Portfolios as well as other customers of the Advisor, including any other of the Portfolios, the Advisor may, to the extent permitted by applicable laws and regulations, but shall not be obligated to, aggregate the securities to be so sold or purchased in order to obtain best execution, including lower brokerage commissions, if applicable. In such event, allocation of the securities so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Advisor in the manner it considers to be the most equitable and consistent with its fiduciary obligations to the Portfolio;

(e) the Advisor shall maintain books and records with respect to each Portfolio’s securities transactions and shall render to the Trust’s Trustees such periodic and special reports as the Trustees may reasonably request; and

(f) the investment management services of the Advisor to any of the Portfolios under this Agreement are not to be deemed exclusive, and the Advisor shall be free to render similar services to others.

3. The Trust has delivered copies of each of the following documents to the Advisor and will promptly notify and deliver to it all future amendments and supplements, if any:

(a) The Declaration of Trust;

(b) The By-Laws;

(c) Certified resolutions of the. Trustees of the Trust authorizing the appointment of the Advisor and approving the form of this Agreement; and

(d) The Trust’s Notification of Registration on Form N-8A and Registration Statement as filed with the Securities and Exchange Commission (the “Commission”).

4. With respect to each Portfolio, the Advisor will select brokers and dealers to effect all portfolio transactions for the Portfolio, subject to the conditions set forth herein. The Advisor will place all necessary orders with brokers, dealers, or issuers, and will negotiate brokerage commissions, if applicable. The Advisor is directed at all times to seek to execute brokerage transactions for the Portfolio (i) in accordance with any written policies, practices or procedures that may be established by the Board, from time to time, or (ii) as described in the Prospectus. In placing any orders for the purchase or sale of investments for the Portfolio, in the name of the Portfolio or its nominees, the Advisor shall use its best efforts to obtain for the Portfolio the most favorable overall terms and best execution, considering all of the circumstances, and shall maintain records adequate to demonstrate compliance with this requirement.

(a) Subject to the appropriate policies and procedures approved by the Board, the Advisor may, to the extent authorized by Section 28(e) of the Securities Exchange Act of 1934 (the “1934 Act”), cause a Portfolio to pay a broker or dealer that provides brokerage or research services to the Advisor or that Portfolio, an amount of commission for effecting a portfolio transaction in excess of the amount of commission another broker or dealer would have charged for effecting that transaction if the Advisor determines, in good faith, that such amount of commission is reasonable in relationship to the value of the brokerage or research services provided, viewed in terms of that particular transaction or the Advisor’s overall responsibilities to that Portfolio or its other advisory clients. To the extent authorized by Section 28(e) and the Board, the Advisor shall not be deemed to have acted unlawfully or to have breached any duty created by this Agreement or otherwise solely by reasons of those actions. In addition, subject to seeking the most favorable overall terms and best execution available, the Advisor may also consider sales of shares of the Trust as a factor in the selection of brokers and dealers. Subject to seeking the most favorable overall terms and best execution, the Board may cause or direct the Advisor to effect transactions in portfolio securities through broker-dealers in a manner that will help generate resources to pay the cost of certain expenses which the Trust is required to pay or for which the Trust is required to arrange payment.

(b) On occasions when the Advisor deems the purchase or sale of a security to be in the best interest of a Portfolio as well as other clients of the Advisor, the Advisor to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities to be purchased or sold to attempt to obtain a more favorable price or lower brokerage commissions and more efficient execution. In such event, allocation of the securities so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Advisor in accordance with the 1940 Act and SEC or SEC staff guidance thereunder, and in the manner that it considers to be the most equitable and consistent with its fiduciary obligations to that Portfolio and to its other clients.

(c) The Trust hereby agrees that any entity or person associated with the Advisor that is a member of a national securities exchange is authorized to effect any transaction on such exchange for the account of the Portfolio to the extent and as permitted by Section 11(a)(1)(H) of the 1934 Act.

In accordance with Section 11(a) of the 1934 Act and Rule 11a2-2(T) thereunder, and subject to any other applicable laws and regulations including Section 17(e) of the 1940 Act and the rules thereunder, the Advisor is authorized to place orders on behalf of the Trust through any of the Advisor’s affiliates (collectively, “Affiliated Broker-Dealers”) for: (i) securities, if, in each instance, an Affiliated Broker-Dealer is registered as a broker or dealer with the Commission; or (ii) futures contracts if, in each instance, an Affiliated Broker-Dealer is registered as a futures commission merchant (“FCM”) with the Commodities Futures Trading Commission (“CFTC”). All such orders placed shall be in such amounts and proportions as the Advisor shall determine consistent with the above standards, and the Advisor will report on all such orders placed to the Board as required by applicable law, indicating the brokers, dealers or FCMs with which such orders have been placed.

The Trust agrees and consents that the Advisor may permit or cause to execute agency cross transactions (collectively, “Cross transactions”) for the Trust provided such transactions comply with Rule 206(3)-2 under the Investment Advisers Act, Rule 17e-1 under the 1940 Act and any other applicable laws or regulations. Cross transactions are transactions that may be effected by an Affiliated Broker-Dealer acting for both the Trust and the counterparty to the transaction. Cross transactions enable the Affiliated Broker-Dealers to purchase or sell a block of securities for an account at a set price and possibly avoid an unfavorable price movement that may be created if the Advisor attempted to effect such purchase or sell order in the open market. However, the Trust should note that an Affiliated Broker-Dealer has a potentially conflicting division of loyalties and responsibilities regarding both parties to Cross transactions and that an Affiliated Broker-Dealer, if acting as broker, may receive commissions from both parties to such transactions. The Advisor understands that its authority to execute Cross transactions for the Trust is terminable at will without penalty, effective upon receipt by the Advisor of written notice from the Trust, and that the failure to terminate such authorization will result in its continuation.

In connection with any Cross transaction, the Advisor will promptly provide the Trust with a confirming report and other necessary information required by the Trust that describes the details of any such trade, or information that the Trust may reasonably request or that may be required by applicable law. In addition, the Advisor will provide to the Trust disclosure of the commissions received by the Affiliated Broker Dealers for executing the other side of a Cross transaction.

(d) The Advisor will periodically review the Trust’s portfolio transactions to ensure that such transactions are conducted in accordance with this Section 4.

5. The Advisor shall keep each Portfolio’s books and records required to be maintained by it pursuant to paragraph 2(e). The Advisor agrees that all records which it maintains for any Portfolio are the property of the Trust and it will promptly surrender any of such records to the Trust upon the Trust’s request. The Advisor further agrees to preserve for the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act any such records as are required to be maintained by the Advisor with respect to any Portfolio by Rule 31a-1 of the Commission under the 1940 Act.

6. During the term of this Agreement the Advisor will pay all expenses incurred by it in connection with its activities under this Agreement, other than the cost of securities and investments purchased for a Portfolio (including taxes and brokerage commissions, if any).

7. For the services provided and the expenses borne pursuant to this Agreement, each Portfolio will pay to the Advisor as full compensation therefor a fee at an annual rate set forth on Schedule A attached hereto. Such fee will be computed daily and payable as agreed by the Trust and the Advisor, but no more frequently than monthly.

8. The Advisor represents and warrants that:

(a) with respect to those activities that it performs for or on behalf of the Trust, it has adopted policies and procedures reasonably designed to prevent the Trust from violating the “Federal Securities Laws”, as such term is defined in Rule 38a-1 under the 1940 Act;

(b) no less frequently than quarterly, it shall review, and provide all reasonable and necessary reports and assistance requested by the Trust, regarding:

(i) the adequacy of its policies and procedures; and

(ii) the effectiveness of their implementation; and

(i) any material changes made to its policies and procedures since the date of the last report delivered pursuant to paragraph (b) of this Section 8;

(ii) any material changes to the policies and procedures recommended as a result of the annual review conducted pursuant to paragraph (b) of this Section 8; and

(iii) each “Material Compliance Matter”, as such term is defined in Rule 38a-1 under the 1940 Act

9. The Advisor shall not be liable for any error of judgment or mistake of law or for any loss suffered by any Portfolio in connection with the matters to which this Agreement relates, except a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services (in which case any award of damages shall be limited to the period and the amount set forth in Section 36(b)(3) of the 1940 Act) or a loss resulting from willful misfeasance, bad faith or gross negligence on its part in the performance of its duties or from reckless disregard by it of its obligations and duties under this Agreement.

10. This Agreement will become effective as to a particular Portfolio on the later of the date of its execution or the date of the commencement of operations of that Portfolio and,

unless sooner terminated as provided herein, shall continue in effect for a period of two years thereafter. Thereafter, if not terminated, this Agreement shall continue in effect as to a particular Portfolio for successive periods of twelve months, only so long as such continuance is specifically approved at least annually in conformity with the requirements of the 1940 Act; provided, however, that this Agreement may be terminated with respect to any Portfolio at any time, without the payment of any penalty, by vote of a majority of all the Trustees of the Trust or by vote of a majority of the outstanding voting securities of that Portfolio on 60 days’ written notice to the Advisor, or by the Advisor at any time, without the payment of any penalty, on 90 days’ written notice to the Trust. The termination of this Agreement with respect to one Portfolio shall not result in the termination of this Agreement with respect to any other Portfolio. This Agreement will automatically and immediately terminate in the event of its “assignment” (as defined in the 1940 Act).

11. The Advisor shall for all purposes herein be deemed to be an independent contractor and shall, unless otherwise expressly provided herein or authorized by the Trustees of the Trust from time to time, have no authority to act for or represent the Trust in any way or otherwise be deemed an agent of the Portfolios.

12. Except to the extent permitted by the 1940 Act or the rules or regulations thereunder or pursuant to any exemptive relief granted by the Commission, this Agreement may be amended by the parties only if such amendment, if material, is specifically approved by the “vote of a majority of the outstanding voting securities” (as defined in the 1940 Act) of the affected Portfolio(s) (unless such approval is not required by Section 15 of the 1940 Act as interpreted by the Commission or its staff) and by the vote of a majority of the Independent Trustees of the Trust cast in person at a meeting called for the purpose of voting on such approval.

13. Notices of any kind to be given to the Advisor by the Trust shall be in writing and shall be duly given if mailed or delivered to the Advisor at 522 Fifth Avenue, New York, New York 10036, Attention: J.P. Morgan Investment Management Inc., or at such other address or to such other individual as shall be specified by the Advisor to the Trust. Notices of any kind to be given to the Trust by the Advisor shall be in writing and shall be duly given if mailed or delivered to JPMorgan Institutional Trust, 522 Fifth Avenue, New York, New York 10036, Attention: President, with a copy to the General Counsel at the same address, or at such other address or to such other individual as shall be specified by the Trust to the Advisor.

14. The Trustees of the Trust have authorized the execution of this Agreement in their capacity as Trustees and not individually, and the Advisor agrees that neither the Trustees nor any officer or employee of the Trust nor any Portfolio’s investors nor any representative or agent of the Trust or of the Portfolio(s) shall be personally liable upon, or shall resort be had to their private property for the satisfaction of, obligations given, executed or delivered on behalf of or by the Trust or the Portfolio(s), that such Trustees, officers, employees, investors, representatives and agents shall not be personally liable hereunder, and that it shall look solely to the trust property for the satisfaction of any claim hereunder.

15. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original.

16. This Agreement shall be governed by and construed in accordance with the laws of the State of New York (without giving effect to its conflict of laws principles), or any of the applicable provisions of the 1940 Act. To the extent that the laws of the State of New York, or any of the provisions in this Agreement, conflict with applicable provisions of the 1940 Act, the latter shall control. Any question of interpretation of any term or provision of this Agreement having a counterpart in or otherwise derived from a term or provision of the 1940 Act shall be resolved by reference to such term or provision of the 1940 Act and to interpretations thereof, if any, by the United States courts or, in the absence of any controlling decision of any such court, by rules, regulations or orders of the SEC validly issued pursuant to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act or rule adopted thereunder reflected in any provision of this Agreement is relaxed by a rule, regulation or order of the SEC, whether of special or of general application, such provision shall be deemed to incorporate the effect of such rule, regulation or order.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their officers designated below as of the 4th day of February, 2005.


JPMORGAN INSTITUTIONAL TRUST

By:		/s/ Robert L. Young
		Robert L. Young
Title.		Senior Vice President

J.P. MORGAN INVESTMENT MANAGEMENT INC.

By:		/s/ Gary J. Madich
		Gary J. Madich
Title.		Senior Managing Director

SCHEDULE A

TO THE ADVISORY AGREEMENT

JPMorgan Institutional Trust


Portfolio Name		Advisory Fee (as a percentage of average daily net assets) (annualized)
JPMorgan Ultra Short-Term Bond Trust		0.25%
JPMorgan Short-Term Bond Trust		0.25%
JPMorgan Intermediate Bond Trust		0.30%
JPMorgan Core Bond Trust		0.30%
JPMorgan Equity Index Trust		0.25%

EX-99.G 3 dex99g.htm GLOBAL CUSTODY AND FUND ACCOUNTING AGREEMENT Global Custody and Fund Accounting Agreement

Exhibit (g)

LOGO

GLOBAL CUSTODY AND FUND ACCOUNTING AGREEMENT

BETWEEN

EACH OF THE ENTITIES LISTED ON SCHEDULE A

AND

JPMORGAN CHASE BANK, N.A.

GLOBAL CUSTODY AND FUND ACCOUNTING AGREEMENT

TABLE OF CONTENTS


1.	INTENTION OF THE PARTIES; DEFINITIONS		1

	1.1	Intention of the Parties	1

	1.2	Definitions	2

2.	WHAT BANK IS REQUIRED TO DO		4

	2.1	Set Up Accounts	4

	2.2	Cash Account	4

	2.3	Segregation of Assets; Nominee Name	4

	2.4	Settlement of Trades	5

	2.5	Contractual Settlement Date Accounting	5

	2.6	Actual Settlement Date Accounting	6

	2.7	Income Collection (Autocredit^®)	6

	2.8	Certain Ministerial Acts	6

	2.9	Corporate Actions	7

	2.10	Proxies	8

	2.11	Statements	9

	2.12	Access to Bank’s Records	10

	2.13	Maintenance of Financial Assets at Subcustodian Locations	10

	2.14	Tax Relief Services	10

	2.15	Foreign Exchange Transactions	10

	2.16	Fund Accounting Services	10

3.	INSTRUCTIONS		11

	3.1	Acting on Instructions; Unclear Instructions	11

	3.2	Confirmation of Oral Instructions/ Security Devices	11

	3.3	Instructions; Contrary to Law/Market Practice	11

	3.4	Cut-off Times	12

4.	FEES EXPENSES AND OTHER AMOUNTS OWING TO BANK		12

	4.1	Fees and Expenses	12

	4.2	Overdrafts	12

	4.3	Bank’s Right Over Securities; Set-off	12


5.	SUBCUSTODIANS, SECURITIES DEPOSITORIES AND OTHER AGENTS		13

	5.1	Appointment of Subcustodians	13

	5.2	Liability for Subcustodians	14

	5.3	Use of Agents	14

6.	ADDITIONAL PROVISIONS RELATING TO CUSTOMER		15

	6.1	Representations of Customer and Bank	15

	6.2	Customer to Provide Certain Information to Bank	15

	6.3	Customer is Liable to Bank Even if it is Acting for Another Person	15

7.	WHEN BANK IS LIABLE TO CUSTOMER		15

	7.1	Standard of Care; Liability	15

	7.2	Force Majeure	16

	7.3	Bank Can Consult With Counsel	17

	7.4	Bank Provides Diverse Financial Services and May Generate Profits as a Result	17

8.	TAXATION		17

	8.1	Tax Obligations	17

	8.2	Tax Relief Services	18

9.	TERMINATION		19

10.	MISCELLANEOUS		19

	10.1	Notices	19

	10.2	Successors and Assigns	19

	10.3	Interpretation	19

	10.4	Entire Agreement	19

	10.5	Information Concerning Deposits at Bank’s London Branch	20

	10.6	Insurance	20

	10.7	Governing Law and Jurisdiction	20

	10.8	Severability; Waiver; and Survival	21

	10.9	Counterparts	21

	10.10	No Third Party Beneficiaries	22

GLOBAL CUSTODY AND FUND ACCOUNTING AGREEMENT

This Agreement is between JPMORGAN CHASE BANK, N.A. (“Bank”), with a place of business at 270 Park Avenue, New York, New York; and each of the entities listed on Schedule A hereto, each of which is acting on behalf of each of the portfolios listed under its name on Schedule A (each, a “Fund”), with a place of business at 522 Fifth Avenue, New York, NY 10036. For purposes of this Agreement, each individual Fund is considered a separate “Customer.”

This Agreement replaces the current agreements covering custody and fund accounting services for each of the Funds and each of them is hereby superceded by this Agreement.

The effective date of this Agreement for each entity is:


Entity		Agreement Effective Date
JPMorgan Institutional Trust		February 4, 2005
JPMorgan Trust I		February 18, 2005
JPMorgan Trust II		February 18, 2005
J.P. Morgan Mutual Fund Group		February 19, 2005
J.P. Morgan Fleming Mutual Fund Group, Inc.		February 19, 2005
J.P. Morgan Mutual Fund Investment Trust		February 19, 2005
J.P. Morgan Series Trust II		February 19, 2005
J.P. Morgan Fleming Series Trust		February 19, 2005
Undiscovered Managers Funds		February 19, 2005
UM Investment Trust		February 19, 2005
UM Investment Trust II		February 19, 2005

1. INTENTION OF THE PARTIES; DEFINITIONS

1.1

Intention of the Parties.

(a) This Agreement sets out the terms governing custodial, settlement and certain other associated services offered by Bank to Customer. Bank will be responsible for the performance of only those Securities custody duties that are set forth in this Agreement. Customer acknowledges that Bank is not providing any legal, tax or investment advice in connection with the services hereunder.

(b) Investing in foreign markets may be a risky enterprise. The holding of Financial Assets and cash in foreign jurisdictions may involve risks of loss or other special considerations. Bank will not be liable for any loss that results from the general risks of investing or Country Risk.

1.2

Definitions.

(a) As used herein, the following terms have the meaning hereinafter stated.

“Account” has the meaning set forth in Section 2.1 of this Agreement.

“Affiliate” means an entity controlling, controlled by, or under common control with, Bank.

“Affiliated Subcustodian” means a Subcustodian that is an Affiliate.

“Applicable Law” means any statute, whether national, state or local, applicable in the United States or any other country, the rules of the treaty establishing the European Community, any other law, rule, regulation or interpretation of any governmental entity, any applicable common law, and any decree, injunction, judgment, order, ruling, or writ of any governmental entity.

“Authorized Person” means any person who has been designated by written notice from Customer (or by any agent designated by Customer, including, without limitation, an investment manager) to act on behalf of Customer hereunder. Such persons will continue to be Authorized Persons until such time as Bank receives Instructions from Customer (or its agent) that any such person is no longer an Authorized Person.

“Bank Indemnitees” means Bank, its Subcustodians, and their respective nominees, directors, officers, employees and agents.

“Bank’s London Branch” means the London branch office of JPMorgan Chase Bank.

“Cash Account” has the meaning set forth in Section 2.1(a)(ii).

“Corporate Action” means any subscription right, bonus issue, stock repurchase plan, redemption, exchange, tender offer, or similar matter with respect to a Financial Asset in the Securities Account that require discretionary action by the holder, but does not include proxy solicitations.

“Country Risk” means the risk of investing or holding assets in a particular country or market, including, but not limited to, risks arising from nationalization, expropriation or other governmental actions; the country’s financial infrastructure, including prevailing custody and settlement practices; laws applicable to the safekeeping and recovery of Financial Assets and cash held in custody; the regulation of the banking and securities industries, including changes in market rules; currency restrictions, devaluations or fluctuations; and market conditions affecting the orderly execution of securities transactions or the value of assets.

“Entitlement Holder” means the person named on the records of a Securities Intermediary as the person having a Securities Entitlement against the Securities Intermediary.

“Financial Asset” means a Security and refers, as the context requires, either to the asset itself or to the means by which a person’s claim to it is evidenced, including a Security, a security certificate, or a Securities Entitlement. “Financial Asset” does not include cash.

“Instructions” means instructions which: (i) contain all necessary information required by Bank to enable Bank to carry out the Instructions; (ii) are received by Bank in writing or via Bank’s electronic instruction system, SWIFT, telephone, tested telex, facsimile or such other methods as are for the time being agreed by Customer (or an Authorized Person) and Bank; and (iii) Bank believes in good faith have been given by an Authorized Person or are transmitted with proper testing or authentication pursuant to terms and conditions which Bank may specify.

“Liabilities” means any liabilities, losses, claims, costs, damages, penalties, fines, obligations, or expenses of any kind whatsoever (including, without limitation, reasonable attorneys’, accountants’, consultants’ or experts’ fees and disbursements).

“Securities” means stocks, bonds, rights, warrants and other negotiable and non-negotiable instruments, whether issued in certificated or uncertificated form, that are commonly traded or dealt in on securities exchanges or financial markets. “Securities” also means other obligations of an issuer, or shares, participations and interests in an issuer recognized in the country in which it is issued or dealt in as a medium for investment and any other property as may be acceptable to Bank for the Securities Account.

“Securities Account” means each Securities custody account on Bank’s records to which Financial Assets are or may be credited pursuant hereto.

“Securities Depository” has the meaning set forth in Section 5.1 of this Agreement.

“Securities Entitlement” means the rights and property interests of an Entitlement Holder with respect to a Financial Asset as set forth in Part 5 of Article 8 of the Uniform Commercial Code of the State of New York, as the same may be amended from time to time.

“Securities Intermediary” means Bank, a Subcustodian, a Securities Depository, and any other financial institution which in the ordinary course of business maintains Securities custody accounts for others and acts in that capacity.

“Subcustodian” has the meaning set forth in Section 5.1 and includes Affiliated Subcustodians.

(b) All terms in the singular will have the same meaning in the plural unless the context otherwise provides and visa versa.

2. WHAT BANK IS REQUIRED TO DO

2.1

Set Up Accounts.

(a) Bank will establish and maintain the following accounts (“Accounts”):

(i)

a Securities Account in the name of Customer for Financial Assets, which may be received by or on behalf of Bank or its Subcustodian for the account of Customer, including as an Entitlement Holder; and

(ii)

an account in the name of Customer (“Cash Account”) for any and all cash in any currency received by or on behalf of Bank for the account of Customer.

Notwithstanding paragraph (ii), cash held in respect of those markets where Customer is required to have a cash account in its own name held directly with the relevant Subcustodian or a Securities Depository will be held in that manner and will not be part of the Cash Account.

(b) At the request of Customer, additional Accounts may be opened in the future, which will be subject to the terms of this Agreement.

2.2

Cash Account.

Except as otherwise provided in Instructions acceptable to Bank, all cash held in the Cash Account will be deposited during the period it is credited to the Accounts in one or more deposit accounts at Bank or at Bank’s London Branch. Any cash so deposited with Bank’s London Branch will be payable exclusively by Bank’s London Branch in the applicable currency, subject to compliance with Applicable Law, including, without limitation, any restrictions on transactions in the applicable currency imposed by the country of the applicable currency.

2.3

Segregation of Assets; Nominee Name.

(a) Bank will identify in its records that Financial Assets credited to Customer’s Securities Account belong to Customer (except as otherwise may be agreed by Bank and Customer).

(b) To the extent permitted by Applicable Law or market practice, Bank will require each Subcustodian to identify in its own records that Financial Assets held at such Subcustodian by Bank on behalf of its customers belong to customers of Bank, such that it is readily apparent that the Financial Assets do not belong to Bank or the Subcustodian.

(i)

to hold in bearer form, such Financial Assets as are customarily held in bearer form or are delivered to Bank or its Subcustodian in bearer form;

(ii)

to hold Securities in or deposit Securities with any Securities Depositary, settlement system or dematerialized book entry or similar systems; and

(iii)

to register in the name of Customer, Bank, a Subcustodian, a Securities Depository, or their respective nominees, such Financial Assets as are customarily held in registered form.

(d) Bank is authorized, when directed to do so by Customer, to hold Financial Assets at third parties and to register Financial Assets in broker “street name” or in the name of other third parties (or their nominees). Notwithstanding Section 7.1, Bank shall have no liability for any loss of Financial Assets or other damages resulting from holding or registering Financial Assets as so directed by the Customer.

Customer authorizes Bank or its Subcustodian to hold Financial Assets in omnibus accounts and will accept delivery of Financial Assets of the same class and denomination as those with Bank or its Subcustodian.

2.4

Settlement of Trades.

When Bank receives an Instruction directing settlement of a transaction in Financial Assets that includes all information required by Bank, Bank will use reasonable care to effect such settlement as instructed. Settlement of transactions in Financial Assets will be conducted in accordance with prevailing standards of the market in which the transaction occurs. Without limiting the generality of the foregoing, the risk of loss will be Customer’s whenever Bank delivers Financial Assets or payment in accordance with applicable market practice in advance of receipt or settlement of the expected consideration. In the case of the failure of Customer’s counterparty (or other appropriate party) to deliver the expected consideration as agreed, Bank will contact the counterparty to seek settlement, but Bank will not be obligated to institute legal proceedings, file a proof of claim in any insolvency proceeding, or take any similar action.

2.5

Contractual Settlement Date Accounting.

(a) Bank will effect book entries on a “contractual settlement date accounting” basis as described below with respect to the settlement of trades in those markets where Bank generally offers contractual settlement date accounting and will notify Customer of those markets from time to time.

(i)

Sales: On the settlement date for a sale, Bank will credit the Cash Account with the proceeds of the sale and transfer the relevant Financial Assets to an account at the Bank pending settlement of the trade where not already delivered.

(ii)

Purchases: On the settlement date for the purchase (or earlier, if market practice requires delivery of the purchase price before the settlement date), Bank will debit the Cash Account for the settlement amount and credit a separate account at the Bank. Bank then will post the Securities Account as awaiting receipt of the expected Financial Assets. Customer will not be

entitled to the Financial Assets that are awaiting receipt until Bank or a Subcustodian actually receives them.

Bank reserves the right to restrict in good faith the availability of contractual settlement date accounting for credit or operational reasons.

(b) Bank may (in its absolute discretion) upon oral or written notification to Customer reverse any debit or credit made pursuant to Section 2.5(a) prior to a transaction’s actual settlement, and Customer will be responsible for any costs or liabilities resulting from such reversal. Customer acknowledges that the procedures described in this sub-section are of an administrative nature, and Bank does not undertake to make loans and/or Financial Assets available to Customer pursuant to this sub-section.

2.6

Actual Settlement Date Accounting.

With respect to any sale or purchase transaction that is not posted to the Account on the contractual settlement date as referred to in Section 2.5, Bank will post the transaction on the date on which the cash or Financial Assets received as consideration for the transaction is actually received by Bank.

2.7

Income Collection (Autocredit^®).

(a) Bank will credit the Cash Account with income and redemption proceeds on Financial Assets in accordance with the times notified by Bank from time to time on or after the anticipated payment date, net of any taxes that are withheld by Bank or any third party. Where no time is specified for a particular market, income and redemption proceeds from Financial Assets will be credited only after actual receipt and reconciliation. Bank may reverse such credits upon oral or written notification to Customer that Bank believes that the corresponding payment will not be received by Bank within a reasonable period or such credit was incorrect.

(b) Bank will make good faith efforts in its discretion to contact appropriate parties to collect unpaid interest, dividends or redemption proceeds, but neither Bank nor its Subcustodians will be obliged to file any formal notice of default, institute legal proceedings, file a proof of claim in any insolvency proceeding, or take any similar action.

2.8

Certain Ministerial Acts.

Until Bank receives Instructions to the contrary, Bank will:

(a)

present all Financial Assets for which Bank has received notice of a call for redemption or that have otherwise matured, and all income and interest coupons and other income items that call for payment upon presentation;

(b)

execute in the name of Customer such certificates as may be required to obtain payment in respect of Financial Assets;

(c)

exchange interim or temporary documents of title for Financial Assets held in the Securities Account for definitive documents of title; and

(d)

provide information concerning the Accounts to Subcustodians, Securities Depositories, counterparties, issuers of Financial Assets, governmental entities, securities exchanges, self-regulatory entities, and similar entities to the extent required by Applicable Law or as may be required in the ordinary course by market practice or otherwise in order to provide the services contemplated by this Agreement.

2.9

Corporate Actions.

(a) Bank will notify Customer of any Corporate Action of which information is either (i) received by it or by a Subcustodian to the extent that Bank’s central corporate actions department has actual knowledge of the Corporate Action in time to notify its customers in a timely manner; or (ii) published via a formal notice in publications and reporting services routinely used by Bank for this purpose in time for Bank to notify its customers in a timely manner. Bank also will use its reasonable efforts to notify Customer of any class action litigation for which information is actually received by Bank’s central corporate actions department but shall not be liable for any Liabilities arising out of Bank’s failure to identify Customer’s interest in any class action litigation. Bank does not commit, however, to provide information concerning Corporate Actions or class action litigation relating to Financial Assets being held at Customer’s request in a name not subject to the control of Bank or its Subcustodian.

(b) If an Authorized Person fails to provide Bank with timely Instructions with respect to any Corporate Action or class action, neither Bank nor its Subcustodians or their respective nominees will take any action in relation to that Corporate Action or class action, except as otherwise agreed in writing by Bank and Customer or as may be set forth by Bank as a default action in the notification it provides under Section 2.9 (a) with respect to that Corporate Action or class action.

(c) Bank may sell or otherwise dispose of fractional interests in Financial Assets arising out of a Corporate Action or class action litigation and, to the extent necessary to protect Customer’s interest in that Corporate Action or class action, credit the Cash Account with the proceeds of the sale or disposition. If some, but not all, of an outstanding class of Financial Asset is called for redemption, Bank may allot the amount redeemed among the respective beneficial holders of such class of Financial Asset in any manner Bank deems to be fair and equitable. Bank will promptly notify Customer of any action taken pursuant to this sub-section.

(d) Notices of Corporate Actions and class actions dispatched to Customer may have been obtained from sources which Bank does not control and may have been translated or summarized. Although Bank believes such sources to be reliable, Bank has no duty to verify the information contained in such notices nor the faithfulness of any translation or summary and therefore does not guarantee its accuracy, completeness or timeliness, and shall not be liable to Customer for any loss that may result from relying on such notice.

2.10

Proxies.

(a) Subject to and upon the terms of this sub-section, Bank will provide Customer with information which it receives on matters to be voted upon at meetings of holders of Financial Assets (“Notifications”), and Bank will act in accordance with Customer’s Instructions in relation to such Notifications (“the active proxy voting service”). If information is received by Bank at its proxy voting department too late to permit timely voting by Customer, Bank’s only obligation will be to provide, so far as reasonably practicable, a Notification (or summary information concerning a Notification) on an “information only” basis.

(b) The active proxy voting service is available only in certain markets, details of which are available from Bank on request. Provision of the active proxy voting service is conditional upon receipt by Bank of a duly completed enrollment form as well as additional documentation that may be required for certain markets.

(c) Bank will act upon Instructions to vote on matters referred to in a Notification, provided Instructions are received by Bank at its proxy voting department by the deadline referred to in the relevant Notification. If Instructions are not received in a timely manner, Bank will not be obligated to provide further notice to Customer and shall not be obliged to vote. It is Customer’s obligation to monitor the agreed upon means of providing Notifications to determine if new Notifications have been received.

(d) Bank reserves the right to provide Notifications or parts thereof in the language received. Bank will attempt in good faith to provide accurate and complete Notifications, whether or not translated.

(e) Customer acknowledges that Notifications and other information furnished pursuant to the active proxy voting service (“information”) are proprietary to Bank and that Bank owns all intellectual property rights, including copyrights and patents, embodied therein. Accordingly, Customer will not make any use of such information except in connection with the active proxy voting service.

(f) In markets where the active proxy voting service is not available or where Bank has not received a duly completed enrollment form or other relevant documentation, Bank will not provide Notifications to Customer but will endeavor to act upon Instructions to vote on matters before meetings of holders of Financial Assets where it is reasonably practicable for Bank (or its Subcustodians or nominees as the case may be) to do so and where such Instructions are received in time for Bank to take timely action (the “passive proxy voting service”).

(g) Customer acknowledges that the provision of proxy voting services (whether active or passive) may be precluded or restricted under a variety of circumstances. These circumstances include, but are not limited to:

(i)

the Financial Assets being on loan or out for registration,

(ii)

the pendency of conversion or another corporate action;

(iii)

Financial Assets being held at Customer’s request in a name not subject to the control of Bank or its Subcustodian;

(iv)

in a margin or collateral account at Bank or another bank or broker, or otherwise in a manner which affects voting;

(v)

local market regulations or practices, or restrictions by the issuer;

(vi)

Bank may be required to vote all shares held for a particular issue for all of Bank’s customers on a net basis (i.e. a net yes or no vote based on voting instructions received from all its customers). Where this is the case, Bank will inform Customer by means of the Notification.

(h) Notwithstanding the fact that Bank may act in a fiduciary capacity with respect to Customer under other agreements, in performing active or passive voting proxy services Bank will be acting solely as the agent of Customer, and will not exercise any discretion, with regard to such proxy services or vote any proxy except when directed by an Authorized Person.

2.11

Statements and Information Available On-Line.

(a) Bank will send, or make available on-line, to Customer, at times mutually agreed upon, a formal statement of account in Bank’s standard format for each Account maintained by Customer with Bank, identifying the Financial Assets and cash held in each Account (each such statement a “Statement of Account”). Additionally, Bank will send (or make available on-line to) Customer an advice or notification of any transfers of cash or Financial Assets with respect to each Account. Bank will not be liable with respect to any matter set forth in those portions of any Statement of Account or any such advice (or reasonably implied therefrom) to which Customer has not given Bank a written exception or objection within sixty (60) days of receipt of the Statement of Account, provided such matter is not the result of Bank’s negligence, willful misconduct or bad faith. References in this Agreement to Statements of Account include Statements of Account in electronic form.

(b) Prices and other information obtained from third parties which may be contained in any Statement of Account or other statement sent to Customer have been obtained from sources Bank believes to be reliable. Bank does not, however, make any representation as to the accuracy of such information or that the prices specified necessarily reflect the proceeds that would be received on a disposal of the relevant Financial Assets.

(c) Customer acknowledges that, except for Statements of Account or as otherwise expressly agreed by Bank, records and reports available to it on-line may not be accurate due to mis-postings, delays in updating Account records, and other causes. Bank will not be liable for any loss or damage arising out of the inaccuracy of any such records or reports accessed on-line.

2.12

Access to Bank’s Records.

Bank will allow Customer’s independent public accountants such reasonable access to the records of Bank relating to Financial Assets as is required in connection with their examination of books and records pertaining to Customer’s affairs. Subject to restrictions under Applicable Law, Bank also will obtain an undertaking to permit Customer’s independent public accountants, reasonable access to the records of any Subcustodian of Securities held in the Securities Account as may be required in connection with such examination.

2.13

Maintenance of Financial Assets at Subcustodian Locations.

(a) Unless Instructions require another location acceptable to Bank, Financial Assets will be held in the country or jurisdiction in which their principal trading market is located, where such Financial Assets may be presented for payment, where such Financial Assets were acquired, or where such Financial Assets are held. Bank reserves the right to refuse to accept delivery of Financial Assets or cash in countries and jurisdictions other than those referred to in Schedule 1 to this Agreement, as in effect from time to time.

(b) Bank will not be obliged to follow an Instruction to hold Financial Assets with, or have them registered or recorded in the name of, any person not chosen by Bank. However, if Customer does instruct Bank to hold Securities and/or cash with or register or record Securities in the name of a person not chosen by Bank and Bank agrees to do so, the consequences of doing so are at Customer’s own risk and Bank (i) will not be liable therefor and (ii) may not provide services under this Agreement with respect to Securities or cash so held, including, without limitation, services provided under Sections 2.8, 2.9, 2.10, and 8.2.

2.14

Tax Relief Services.

Bank will provide tax relief services as provided in Section 8.2.

2.15

Foreign Exchange Transactions.

To facilitate the administration of Customer’s trading and investment activity, Bank may, but will not be obliged to, enter into spot or forward foreign exchange contracts with Customer, or an Authorized Person, and may also provide foreign exchange contracts and facilities through its Affiliates or Subcustodians. Instructions, including standing Instructions, may be issued with respect to such contracts, but Bank may establish rules or limitations concerning any foreign exchange facility made available. In all cases where Bank, its Affiliates or Subcustodians enter into a master foreign exchange contract that covers foreign exchange transactions for the Accounts, the terms and conditions of that foreign exchange contract and, to the extent not inconsistent, this Agreement, will apply to such transactions.

2.16

Fund Accounting Services.

Bank shall perform fund accounting services as specified on the attached Schedule B.

3. INSTRUCTIONS

3.1

Acting on Instructions; Unclear Instructions.

(a) Customer authorizes Bank to accept and act upon any Instructions received by it without inquiry. Customer will indemnify the Bank Indemnitees against, and hold each of them harmless from, any Liabilities that may be imposed on, incurred by, or asserted against the Bank Indemnitees as a result of any action or omission taken in accordance with any Instructions or other directions upon which Bank is authorized to rely under the terms of this Agreement.

(b) Unless otherwise expressly provided, all Instructions will continue in full force and effect until canceled or superseded.

(c) Bank may (in its sole discretion and without affecting any part of this Section 3.1) seek clarification or confirmation of an Instruction from an Authorized Person and may decline to act upon an Instruction if it does not receive clarification or confirmation satisfactory to it. Bank will not be liable for any loss arising from any delay while it seeks such clarification or confirmation.

(d) In executing or paying a payment order Bank may rely upon the identifying number (e.g. Fedwire routing number or account) of any party as instructed in the payment order. Customer assumes full responsibility for any inconsistency between the name and identifying number of any party in payment orders issued to Bank in Customer’s name.

3.2

Confirmation of Oral Instructions/ Security Devices.

Any Instructions delivered to Bank by telephone will promptly thereafter be confirmed in writing by an Authorized Person. Each confirmation is to be clearly marked “Confirmation.” Bank will not be liable for having followed such Instructions notwithstanding the failure of an Authorized Person to send such confirmation in writing or the failure of such confirmation to conform to the telephone Instructions received. Either party may record any of their telephonic communications. Customer will comply with any security procedures reasonably required by Bank from time to time with respect to verification of Instructions. Customer will be responsible for safeguarding any test keys, identification codes or other security devices that Bank will make available to Customer or any Authorized Person.

3.3

Instructions; Contrary to Law/Market Practice.

Bank need not act upon Instructions which it reasonably believes to be contrary to law, regulation or market practice, but Bank will be under no duty to investigate whether any Instructions comply with Applicable Law or market practice.

3.4

Cut-off Times.

Bank has established cut-off times for receipt of some categories of Instruction, which will be made available to Customer. If Bank receives an Instruction after its established cut-off time, Bank will attempt to act upon the Instruction on the day requested if Bank deems it practicable to do so or otherwise as soon as practicable on the next business day.

4. FEES, EXPENSES AND OTHER AMOUNTS OWING TO BANK

4.1

Fees and Expenses.

Customer will pay Bank for its services hereunder the fees set forth in Schedule C hereto or such other amounts as may be agreed upon in writing from time to time, together with Bank’s reasonable out-of-pocket or incidental expenses, including, but not limited to, legal fees and tax or related fees incidental to processing by governmental authorities, issuers, or their agents. Customer authorizes Bank to deduct amounts owing to it from the Cash Account, for any such fees or expenses from time to time in arrears. Without prejudice to Bank’s other rights, Bank reserves the right to charge interest on overdue amounts from the due date until actual payment at such rate as Bank may reasonably determine.

4.2

Overdrafts.

If a debit to any currency in the Cash Account results (or will result) in a debit balance, then Bank may, in its discretion, (i) advance an amount equal to the overdraft, (ii) or refuse to settle in whole or in part the transaction causing such debit balance, or (iii) if any such transaction is posted to the Securities Account, reverse any such posting. If Bank elects to make such an advance, the advance will be deemed a loan to Customer, payable on demand, bearing interest at the applicable rate charged by Bank from time to time, for such overdrafts, from the date of such advance to the date of payment (both after as well as before judgment) and otherwise on the terms on which Bank makes similar overdrafts available from time to time. No prior action or course of dealing on Bank’s part with respect to the settlement of transactions on Customer’s behalf will be asserted by Customer against Bank for Bank’s refusal to make advances to the Cash Account or to settle any transaction for which Customer does not have sufficient available funds in the applicable currency in the Account.

4.3

Bank’s Right Over Securities; Set-off.

(a) Customer grants Bank a security interest in and a lien on the Financial Assets held in the Securities Account as security for any and all amounts which are now or become owing to Bank under any provision of this Agreement, whether or not matured or contingent (“Indebtedness”).

(b) Without prejudice to Bank’s rights under Applicable Law, Bank may set off against any Indebtedness any amount in any currency standing to the credit of any of Customer’s accounts (whether deposit or otherwise) with any Bank branch or office or with any Affiliate of Bank. For

this purpose, Bank shall be entitled to accelerate the maturity of any fixed term deposits and to effect such currency conversions as may be necessary at its current rates for the sale and purchase of the relevant currencies.

(c) With respect to any obligation of a Customer arising out of this Agreement, the Bank shall look for payment or satisfaction of such obligation solely to the assets of the Customer to which such obligation relates as though the Bank had separately contracted by separate written instrument with respect to each Customer.

5. SUBCUSTODIANS, SECURITIES DEPOSITORIES, AND OTHER AGENTS

5.1

Appointment of Subcustodians; Use of Securities Depositories.

(a) Bank is authorized under this Agreement to act through and hold Customer’s Financial Assets with subcustodians, being at the date of this Agreement the entities listed in Schedule 1 and/or such other entities as Bank may appoint as subcustodians (“Subcustodians”). Bank will use reasonable care, prudence and diligence in the selection and continued appointment of such Subcustodians. In addition, Bank and each Subcustodian may deposit Financial Assets with, and hold Financial Assets in, any securities depository, settlement system, dematerialized book entry system or similar system (together a “Securities Depository”) on such terms as such systems customarily operate and Customer will provide Bank with such documentation or acknowledgements that Bank may require to hold the Financial Assets in such systems.

(b) Any agreement Bank enters into with a Subcustodian for holding Bank’s customers’ assets will provide that such assets will not be subject to any right, charge, security interest, lien or claim of any kind in favor of such Subcustodian or its creditors except a claim for payment for their safe custody or administration, or, in the case of cash deposits, except for liens or rights in favor of creditors of the Subcustodian arising under bankruptcy, insolvency or similar law, and that the beneficial ownership thereof will be freely transferable without the payment of money or value other than for safe custody or administration. Where a Subcustodian deposits Securities with a Securities Depository, Bank will cause the Subcustodian to identify on its records as belonging to Bank, as agent, the Securities shown on the Subcustodian’s account at such Securities Depository. This Section 5.1(b) will not apply to the extent of any special agreement or arrangement made by Customer with any particular Subcustodian.

(c) Bank will not be liable for any act or omission by (or the insolvency of) any Securities Depository. In the event Customer incurs a loss due to the negligence, willful misconduct, or insolvency of a Securities Depository, Bank will make reasonable endeavors, in its discretion, to seek recovery from the Securities Depository, but Bank will not be obligated to institute legal proceedings, file a proof claim in any insolvency proceeding, or take any similar action.

5.2

Liability for Subcustodians.

(a) Subject to Section 7.1(b), Bank shall be liable for the actions or omissions of anySubcustodian to the same extent as if such act or omission was performed by the Bank itself. In the event of any Losses suffered or incurred by a Customer caused by or resulting from the actions or omissions of any Subcustodian for which the Bank would otherwise be liable, the Bank shall promptly reimburse such Customerin the amount of any such Losses. Bank shall also be liable for losses that result from the insolvency of any Affiliated Subcustodian.

(b) Subject to Section 5.1(a) and Bank’s duty to use reasonable care in the monitoring of a Subcustodian’s financial condition as reflected in its published financial statements and other publicly available financial information concerning it customarily reviewed by Bank in its oversight process, Bank will not be responsible for the insolvency of any Subcustodian which is not a branch or an Affiliated Subcustodian.

(c) Bank reserves the right to add, replace or remove Subcustodians. Bank will give prompt notice of any such action, which will be advance notice if practicable. Upon request by Customer, Bank will identify the name, address and principal place of business of any Subcustodian and the name and address of the governmental agency or other regulatory authority that supervises or regulates such Subcustodian.

5.3

Use of Agents.

(a) Bank may provide certain services under this Agreement through third parties, which may be Affiliates. Except to the extent provided in Section 5.2 with respect to Subcustodians, Bank will not be responsible for any loss as a result of a failure by any broker or any other third party that it selects and retains using reasonable care to provide ancillary services that it may not customarily provide itself, including, without limitation, delivery services and providers of information regarding matters such as pricing, proxy voting, corporate actions and class action litigation. Nevertheless, Bank will be liable for the performance of any such broker selected by Bank that is an Affiliate to the same extent as Bank would have been liable if it performed such services itself.

(b) In the case of the sale under Section 2.8 of a fractional interest (or in other cases where Customer has requested Bank to arrange for execution of a trade) Bank will place trades with a broker which is an Affiliate to the extent that Bank has established a program for such trading with such Affiliate. An affiliated broker may charge its customary commission (or retain its customary spread) with respect to any such transaction.

6. ADDITIONAL PROVISIONS RELATING TO CUSTOMER

6.1

Representations of Customer and Bank.

(a) Customer represents and warrants that (i) it has full authority and power, and has obtained all necessary authorizations and consents, to deposit and control the Financial Assets and cash in the Accounts, to use Bank as its custodian in accordance with the terms of this Agreement, to borrow money or otherwise incur indebtedness as contemplated by this Agreement, to pledge Financial Assets as contemplated by Section 4.3, and to enter into foreign exchange transactions; (ii) assuming execution and delivery of this Agreement by Bank, this Agreement is Customer’s legal, valid and binding obligation, enforceable in accordance with its terms and it has full power and authority to enter into and has taken all necessary corporate action to authorize the execution of this Agreement (iii) it has not relied on any oral or written representation made by Bank or any person on its behalf, and acknowledges that this Agreement sets out to the fullest extent the duties of Bank; and (iv) it is a resident of the United States and shall notify Bank of any changes in residency.

(b) Bank represents and warrants that (i) assuming execution and delivery of this Agreement by Customer, this Agreement is Bank’s legal, valid and binding obligation, enforceable in accordance with its terms and (ii) it has full power and authority to enter into and has taken all necessary corporate action to authorize the execution of this Agreement.

Bank may rely upon the above or the certification of such other facts as may be required to administer Bank’s obligations hereunder. Customer shall indemnify Bank against all losses, liability, claims or demands arising directly or indirectly from any such certifications.

6.2

Customer to Provide Certain Information to Bank.

Upon request, Customer will promptly provide to Bank such information about itself and its financial status as Bank may reasonably request, including Customer’s organizational documents and its current audited and unaudited financial statements.

6.3

Customer is Liable to Bank Even if it is Acting for Another Person.

If Customer is acting as an agent for a disclosed or undisclosed principal in respect of any transaction, cash, or Financial Asset, Bank nevertheless will treat Customer as its principal for all purposes under this Agreement. In this regard, Customer will be liable to Bank as a principal in respect of any transactions relating to the Account. The foregoing will not affect any rights Bank might have against Customer’s principal.

7. WHEN BANK IS LIABLE TO CUSTOMER

7.1

Standard of Care; Liability.

(a) Bank shall exercise reasonable care, prudence and diligence in carrying out all its

duties and obligations under this Agreement, and shall be liable to each Customer for any and all claims, liabilities, losses, damages, fines, penalties and expenses (“Losses”) suffered or incurred by such Customerresulting from the failure of Bank to exercise such reasonable care, prudence and diligence or resulting from Bank’s negligence or willful misconduct and to the extent provided in Section 5.2(a). In addition, Bank shall be liable to each applicable Customer for all Losses representing reasonable costs and expenses incurred by such Customer in connection with any claim by such Customer against Bank arising from the obligations of Bank hereunder, including, without limitation, all reasonable attorneys’ fees and expenses incurred by such Customer in connection with any investigations, lawsuits or proceedings relating to such claim; provided that such Customer has recovered from Bank for such claim.

Nevertheless, under no circumstances will Bank be liable for any indirect, incidental, consequential or special damages (including, without limitation, lost profits) of any form incurred by any person or entity, whether or not foreseeable and regardless of the type of action in which such a claim may be brought, with respect to the Accounts, Bank’s performance hereunder, or Bank’s role as custodian.

(b) Customer will indemnify the Bank Indemnitees against, and hold them harmless from, any Liabilities that may be imposed on, incurred by or asserted against any of the Bank Indemnitees in connection with or arising out of (i) Bank’s performance under this Agreement, provided the Bank Indemnitees have acted with reasonable care and have not acted with negligence or engaged in fraud or willful misconduct in connection with the Liabilities in question or (ii) any Bank Indemnitee’s status as a holder of record of Customer’s Financial Assets. Nevertheless, Customer will not be obligated to indemnify any Bank Indemnitee under the preceding sentence with respect to any Liability for which Bank is liable under Section 5.2 of this Agreement. Customer shall have no liability whatsoever for any consequential, special, indirect or speculative loss or damages (including, but not limited to, lost profits) suffered by Bank in connection with the transactions and services contemplated hereby and the relationship established hereby even if Customer has been advised as to the possibility of the same and regardless of the form of action.

(c) Without limiting Subsections 7.1 (a) or (b), Bank will have no duty or responsibility to: (i) question Instructions or make any suggestions to Customer or an Authorized Person regarding such Instructions; (ii) supervise or make recommendations with respect to investments or the retention of Financial Assets; (iii) advise Customer or an Authorized Person regarding any default in the payment of principal or income of any security other than as provided in Section 2.7(b) of this Agreement; (iv) evaluate or report to Customer or an Authorized Person regarding the financial condition of any broker, agent or other party to which Bank is instructed to deliver Financial Assets or cash; or (v) review or reconcile trade confirmations received from brokers (and Customer or its Authorized Persons issuing Instructions will bear any responsibility to review such confirmations against Instructions issued to and Statements of Account issued by Bank).

7.2

Force Majeure.

Bank will maintain and update from time to time business continuation and disaster recovery procedures with respect to its global custody business that it determines from time to time

meet reasonable commercial standards. Bank will have no liability, however, for any damage, loss, expense or liability of any nature that Customer may suffer or incur, caused by an act of God, fire, flood, civil or labor disturbance, war, terrorism, act of any governmental authority or other act or threat of any authority (de jure or de facto), legal constraint, fraud or forgery, malfunction of equipment or software (except where such malfunction is primarily attributable to Bank’s negligence in maintaining the equipment or software), failure of or the effect of rules or operations of any external funds transfer system, inability to obtain or interruption of external communications facilities, or any cause beyond the reasonable control of Bank (including without limitation, the non-availability of appropriate foreign exchange).

7.3

Bank May Consult With Counsel.

Bank will be entitled to rely on, and may act upon the advice of professional advisers in relation to matters of law, regulation or market practice (which may be the professional advisers of Customer), and will not be liable to Customer for any action taken or omitted pursuant to such advice.

7.4

Bank Provides Diverse Financial Services and May Generate Profits as a Result.

Customer acknowledges that Bank or its Affiliates may have a material interest in transactions entered into by Customer with respect to the Account or that circumstances are such that Bank may have a potential conflict of duty or interest. For example, Bank or its Affiliates may act as a market maker in the Financial Assets to which Instructions relate, provide brokerage services to other customers, act as financial adviser to the issuer of such Financial Assets, act in the same transaction as agent for more than one customer, have a material interest in the issue of the Financial Assets; or earn profits from any of these activities. Customer further acknowledges that Bank or its Affiliates may be in possession of information tending to show that the Instructions received may not be in the best interests of Customer but that Bank is not under any duty to disclose any such information.

8. TAXATION

8.1

Tax Obligations.

(a) Customer confirms that Bank is authorized to deduct from any cash received or credited to the Cash Account any taxes or levies required by any revenue or governmental authority for whatever reason in respect of Customer’s Accounts.

(b) Customer will provide to Bank such certifications, documentation, and information as it may require in connection with taxation, and warrants that, when given, this information is true and correct in every respect, not misleading in any way, and contains all material information. Customer undertakes to notify Bank immediately if any information requires updating or correcting. Bank shall not be liable for any taxes, penalties, interest or additions to tax, payable or paid that result from (i) the inaccurate completion of documents by Customer or any third party; (ii) provision to Bank or a third party of inaccurate or misleading information by Customer

or any third party; (iii) the withholding of material information by Customer or any third party; or (iv) as a result of any delay by any revenue authority or any other cause beyond the Bank’s control.

(c) If Bank does not receive appropriate certifications, documentation and information then, as and when appropriate and required, additional tax shall be deducted from all income received in respect of the Financial Assets issued (including, but not limited to, United States non-resident alien tax and/or backup withholding tax).

(d) Customer will be responsible in all events for the timely payment of all taxes relating to the Financial Assets in the Securities Account. Customer will indemnify and hold Bank harmless from and against any and all liabilities, penalties, interest or additions to tax with respect to or resulting from, any delay in, or failure by, Bank (i) to pay, withhold or report any U.S. federal, state or local taxes or foreign taxes imposed on, or (ii) to report interest, dividend or other income paid or credited to the Cash Account, regardless of the reason for such delay or failure, provided, however, that Customer will not be liable to Bank for any penalty or additions to tax due solely as a result of Bank’s negligent acts or omissions with respect to paying or withholding tax or reporting interest, dividend or other income paid or credited to the Cash Account.

8.2

Tax Relief Services.

(a) Subject to the provisions of this Section, Bank will apply for a reduction of withholding tax and any refund of any tax paid or tax credits in respect of income payments on Financial Assets credited to the Securities Account that Bank believes may be available. To defray expenses pertaining to nominal tax claims, Bank may from time-to-time set minimum thresholds as to a de minimus value of tax reclaims or reduction of withholding which it will pursue in respect of income payments under this section.

(b) The provision of a tax relief service by Bank is conditional upon Bank receiving from Customer (i) a declaration of its identity and place of residence and (ii) certain other documentation (pro forma copies of which are available from Bank), prior to the receipt of Financial assets in the Account or the payment of income.

(c) Bank will perform tax relief services only with respect to taxation levied by the revenue authorities of the countries advised to Customer from time to time and Bank may, by notification in writing, in its absolute discretion, supplement or amend the countries in which the tax relief services are offered. Other than as expressly provided in this Section 8.2 Bank will have no responsibility with regard to Customer’s tax position or status in any jurisdiction.

(d) Customer confirms that Bank is authorized to disclose any information requested by any revenue authority or any governmental entity in relation to the processing of any tax relief claim.

9. TERMINATION

Either party may terminate this Agreement on sixty (60) days’ written notice to the other party. If Customer gives notice of termination, it must provide full details of the persons to whom Bank must deliver Financial Assets and cash. If Bank gives notice of termination, then Customer must, within sixty days, notify Bank of details of its new custodian, failing which Bank may elect (at any time after the sixty day notice period) either to retain the Financial Assets and cash until such details are given, continuing to charge fees due (in which case Bank’s sole obligation will be for the safekeeping of the Financial Assets and cash), or deliver the Financial Assets and cash to Customer. Bank will in any event be entitled to deduct any amounts owing to it prior to delivery of the Financial Assets and cash (and, accordingly, Bank will be entitled to sell Financial Assets and apply the sale proceeds in satisfaction of amounts owing to it). Customer will reimburse Bank promptly for all out-of-pocket expenses it incurs in delivering Financial Assets upon termination. Termination will not affect any of the liabilities either party owes to the other arising under this Agreement prior to such termination.

10. MISCELLANEOUS

10.1

Notices.

Notices (other than Instructions) will be served by registered mail or hand delivery to the address of the respective parties as set out on the first page of this Agreement, unless notice of a new address is given to the other party in writing. Notice will not be deemed to be given unless it has been received.

10.2

Successors and Assigns.

This Agreement will be binding on each of the parties’ successors and assigns, but the parties agree that neither party can assign its rights and obligations under this Agreement without the prior written consent of the other party, which consent will not be unreasonably withheld.

10.3

Interpretation.

Headings are for convenience only and are not intended to affect interpretation. References to sections are to sections of this Agreement and references to sub-sections and paragraphs are to sub-sections of the sections and paragraphs of the sub-sections in which they appear.

10.4

Entire Agreement.

(a) The following Rider(s) are incorporated into this Agreement:

Cash Trade Execution;

Cash Sweep;

Accounting Services;

Mutual Fund.

(b) This Agreement, including the Schedules, Exhibits, and Riders (and any separate agreement which Bank and Customer may enter into with respect to any Cash Account), sets out the entire Agreement between the parties in connection with the subject matter, and this Agreement supersedes any other agreement, statement, or representation relating to custody, whether oral or written. Amendments must be in writing and signed by both parties.

10.5

Information Concerning Deposits at Bank’s London Branch.

The Financial Services Compensation Scheme (the “FSCS”) was created under the Financial Services and Markets Act 2000. The terms of the FSCS offer protection in connection with deposits and investments in the event of the persons to whom Bank’s London Branch provides services suffering a financial loss as a direct consequence of Bank’s London Branch being unable to meet any of its liabilities, and subject to the FSCS rules regarding eligible claimants and eligible claims, the Customer may have a right to claim compensation from the FSCS. Subject to the terms of the FSCS, the limit on the maximum compensation sum payable by the FSCS in relation to investment business is £48,000 and in relation to deposits is £31,700. A detailed description of the FSCS (including information on how to make a claim, eligibility criteria and the procedures involved) is available from the FSCS who can be contacted at 7th Floor, Lloyds Chambers, Portsoken Street, London, E1 8BN.

10.6

Insurance.

Bank will not be required to maintain any insurance coverage for the benefit of Customer.

10.7

Governing Law and Jurisdiction.

This Agreement will be construed, regulated, and administered under the laws of the United States or State of New York, as applicable, without regard to New York’s principles regarding conflict of laws. The United States District Court for the Southern District of New York will have the sole and exclusive jurisdiction over any lawsuit or other judicial proceeding relating to or arising from this Agreement. If that court lacks federal subject matter jurisdiction, the Supreme Court of the State of New York, New York County will have sole and exclusive jurisdiction. Either of these courts will have proper venue for any such lawsuit or judicial proceeding, and the parties waive any objection to venue or their convenience as a forum. The parties agree to submit to the jurisdiction of any of the courts specified and to accept service of process to vest personal jurisdiction over them in any of these courts. The parties further hereby knowingly, voluntarily and intentionally waive, to the fullest extent permitted by applicable law, any right to a trial by jury with respect to any such lawsuit or judicial proceeding arising or relating to this Agreement or the transactions contemplated hereby. To the extent that in any jurisdiction Customer may now or hereafter be entitled to claim, for itself or its assets, immunity from suit, execution, attachment (before or after judgment) or other legal process, Customer shall not claim, and it hereby irrevocably waives, such immunity.

10.8

Severability; Waiver; and Survival.

(a) If one or more provisions of this Agreement are held invalid, illegal or unenforceable in any respect on the basis of any particular circumstances or in any jurisdiction, the validity, legality and enforceability of such provision or provisions under other circumstances or in other jurisdictions and of the remaining provisions will not in any way be affected or impaired.

(b) Except as otherwise provided herein, no failure or delay on the part of either party in exercising any power or right hereunder operates as a waiver, nor does any single or partial exercise of any power or right preclude any other or further exercise, or the exercise of any other power or right. No waiver by a party of any provision of this Agreement, or waiver of any breach or default, is effective unless it is in writing and signed by the party against whom the waiver is to be enforced.

10.9

Counterparts.

This Agreement may be executed in several counterparts each of which will be deemed to be an original and together will constitute one and the same agreement.

10.10

No Third Party Beneficiaries.

A person who is not a party to this Agreement shall have no right to enforce any term of this Agreement.


JPMorgan Institutional Trust
JPMorgan Trust I
JPMorgan Trust II
J.P. Morgan Mutual Fund Group
J.P. Morgan Fleming Mutual Fund Group, Inc.
J.P. Morgan Mutual Fund Investment Trust
J.P. Morgan Series Trust II
J.P. Morgan Fleming Series Trust
Undiscovered Managers Funds
UM Investment Trust
UM Investment Trust II

By:		/s/ Stephanie J. Dorsey
Name:		Stephanie Dorsey
Title:		Treasurer
Date:		February 18, 2005

JPMORGAN CHASE BANK, N.A.

By:		/s/ Teresa McGonagle
Name:		Teresa McGonagle
Title:		Senior Vice President
Date:		February 18, 2005

Investment Company Rider to Global Custody Agreement

Between JPMorgan Chase Bank and

The Entities Listed on Appendix A

The following modifications are made to the Agreement:

“2.17. Compliance with Securities and Exchange Commission (“SEC”) rule 17f-5 (“rule 17f-5”).

(a) Customer’s board of directors (or equivalent body) (hereinafter ‘Board’) hereby delegates to Bank, and, except as to the country or countries as to which Bank may, from time to time, advise Customer that it does not accept such delegation, Bank hereby accepts the delegation to it, of the obligation to perform as Customer’s ‘Foreign Custody Manager’ (as that term is defined in rule 17f-5(a)(3) as promulgated under the Investment Company Act of 1940, as amended (“1940 Act”)), including for the purposes of: (i) selecting Eligible Foreign Custodians (as that term is defined in rule 17f-5(a)(1), and as the same may be amended from time to time, or that have otherwise been exempted pursuant to an SEC exemptive order) to hold foreign Financial Assets and Cash, (ii) evaluating the contractual arrangements with such Eligible Foreign Custodians (as set forth in rule 17f-5(c)(2)), (iii) monitoring such foreign custody arrangements (as set forth in rule 17f-5(c)(3)).

(b) In connection with the foregoing, Bank shall:

(i) provide written reports notifying Customer’s Board of the placement of Financial Assets and Cash with particular Eligible Foreign Custodians and of any material change in the arrangements with such Eligible Foreign Custodians, with such reports to be provided to Customer’s Board at such times as the Board deems reasonable and appropriate based on the circumstances of Customer’s foreign custody arrangements (and until further notice from Customer such reports shall be provided not less than quarterly with respect to the placement of Financial Assets and Cash with particular Eligible Foreign Custodians and with reasonable promptness upon the occurrence of any material change in the arrangements with such Eligible Foreign Custodians);

(ii) exercise such reasonable care, prudence and diligence in performing as Customer’s Foreign Custody Manager as a person having responsibility for the safekeeping of foreign Financial Assets and cash would exercise;

(iii) in selecting an Eligible Foreign Custodian, first have determined that foreign Financial Assets and cash placed and maintained in the safekeeping of such Eligible Foreign Custodian shall be subject to reasonable care, based on the standards applicable to custodians in the relevant market, after having considered all factors relevant to the

safekeeping of such foreign Financial Assets and cash, including, without limitation, those factors set forth in rule 17f-5(c)(1)(i)-(iv);

(iv) determine that the written contract with an Eligible Foreign Custodian requires that the Eligible Foreign Custodian shall provide reasonable care for foreign Financial Assets and Cash based on the standards applicable to custodians in the relevant market.

(v) have established a system to monitor the continued appropriateness of maintaining foreign Financial Assets and cash with particular Eligible Foreign Custodians and of the governing contractual arrangements; it being understood, however, that in the event that Bank shall have determined that the existing Eligible Foreign Custodian in a given country would no longer afford foreign Financial Assets and cash reasonable care and that no other Eligible Foreign Custodian in that country would afford reasonable care, Bank shall promptly so advise Customer and shall then act in accordance with the Instructions of Customer with respect to the disposition of the affected foreign Financial Assets and cash.

Subject to (b)(i)-(v) above, Bank is hereby authorized to place and maintain foreign Financial Assets and cash on behalf of Customer with Eligible Foreign Custodians pursuant to a written contract deemed appropriate by Bank.

(c) Except as expressly provided herein, Customer shall be solely responsible to assure that the maintenance of foreign Financial Assets and cash hereunder complies with the rules, regulations, interpretations and exemptive orders as promulgated by or under the authority of the SEC.

(d) Bank represents to Customer that it is a U.S. Bank as defined in Rule 17f-5(a)(7). Customer represents to Bank that: (1) the foreign Financial Assets and cash being placed and maintained in Bank’s custody are subject to the 1940 Act, as the same may be amended from time to time; (2) its Board: (i) has determined that it is reasonable to rely on Bank to perform as Customer’s Foreign Custody Manager (ii) or its investment adviser shall have determined that Customer may maintain foreign Financial Assets and cash in each country in which Customer’s Financial Assets and cash shall be held hereunder and determined to accept Country Risk. Nothing contained herein shall require Bank to make any selection or to engage in any monitoring on behalf of Customer that would entail consideration of Country Risk.

(e) Bank shall provide to Customer such information relating to Country Risk as is specified in Appendix 1 hereto. Customer hereby acknowledges that: (i) such information is solely designed to inform Customer of market conditions and procedures and is not intended as a recommendation to invest or not invest in particular markets; and (ii) Bank has gathered the information from sources it considers reliable, but that Bank shall have no responsibility for inaccuracies or incomplete information.

B. Add a new Section 2.18 to the Agreement as follows:

2.18. Compliance with SEC rule 17f-7 (“rule 17f-7”).

(a) Bank shall, for consideration by Customer, provide an analysis of the custody risks associated with maintaining Customer’s Foreign Assets with each Eligible Securities Depository used by Bank as of the date hereof (or, in the case of an Eligible Securities Depository not used by Bank as of the date hereof, prior to the initial placement of Customer’s foreign Assets at such Depository) and at which any foreign Assets of Customer are held or are expected to be held. The foregoing analysis will be provided to Customer at Bank’s Website. In connection with the foregoing, Customer shall notify Bank of any Eligible Securities Depositories at which it does not choose to have its Foreign Assets held. Bank shall monitor the custody risks associated with maintaining Customer’s foreign Assets at each such Eligible Securities Depository on a continuing basis and shall promptly notify Customer or its adviser of any material changes in such risks.

(b) Bank shall exercise reasonable care, prudence and diligence in performing the requirements set forth in Section 2.17(a) above.

(c) Based on the information available to it in the exercise of diligence, Bank shall determine the eligibility under rule 17f-7 of each depository before including it on Schedule 3 hereto and shall promptly advise Customer if any Eligible Securities Depository ceases to be eligible. (Eligible Securities Depositories used by Bank as of the date hereof are set forth in Schedule 3 hereto, and as the same may be amended on notice to Customer from time to time.)

D. Add the following after the first sentence of Section 5.1(a) of the Agreement: “At the request of Customer, Bank may, but need not, add to Schedule 1 an Eligible Foreign Custodian where Bank has not acted as Foreign Custody Manager with respect to the selection thereof. Bank shall notify Customer in the event that it elects to add any such entity.”

E. Add the following language as Sections 5.1(d) and (e) of the Agreement:

(d) The term Subcustodian as used herein shall mean the following:

(i) a ‘U.S. Bank,’ which shall mean a U.S. bank as defined in rule 17f5(a)(7);

(ii) an ‘Eligible Foreign Custodian,’ which shall mean: (i) a banking institution or trust company, incorporated or organized under the laws of a country other than the United States, that is regulated as such by that country’s government or an agency thereof, and (ii) a majority-owned direct or indirect subsidiary of a U.S. bank or bank holding company which subsidiary is incorporated or organized under the laws of a country other than the United States. In addition, an Eligible Foreign Custodian shall also mean any other entity that shall have been so qualified by exemptive order, rule or other appropriate action of the SEC.

(iii) For purposes of clarity, it is agreed that as used in Section 5.2(a), the term Subcustodian shall not include any Eligible Foreign Custodian as to which Bank has not acted as Foreign Custody Manager.

(e) The term ‘securities depository’ as used herein when referring to a securities depository located outside the U.S. shall mean:

an “Eligible Securities Depository” which, in turn, shall have the same meaning as in rule 17f-7(b)(1)(i)-(vi) as the same may be amended from time to time, or that has otherwise been made exempt pursuant to an SEC exemptive order; provided that, prior to the compliance date with rule 17f-7 for a particular securities depository the term “securities depositories” shall be as defined in (a)(1)(ii)-(iii) of the 1997 amendments to rule 17f-5.

(f) The term “securities depository” as used herein when referring to a securities depository located in the U.S. shall mean a “securities depository” as defined in rule 17f-4(a).

Appendix 1-A

Information Regarding Country Risk

1. To aid Customer in its determinations regarding Country Risk, Bank shall furnish annually and upon the initial placing of Financial Assets and cash into a country the following information (check items applicable):


	A	Opinions of local counsel concerning:

x	i.	Whether applicable foreign law would restrict the access afforded Customer’s independent public accountants to books and records kept by an eligible foreign custodian located in that country.

x	ii.	Whether applicable foreign law would restrict Customer’s ability to recover its Financial Assets and cash in the event of the bankruptcy of an Eligible Foreign Custodian located in that country.

x	iii.	Whether applicable foreign law would restrict Customer’s ability to recover Financial Assets that are lost while under the control of an Eligible Foreign Custodian located in the country.

	B.	Written information concerning:

x	i.	The foreseeability of expropriation, nationalization, freezes, or confiscation of Customer’s Financial Assets.

x	ii.	Whether difficulties in converting Customer’s cash and cash equivalents to U.S. dollars are reasonably foreseeable.

	C.	A market report with respect to the following topics:

	(i) securities regulatory environment, (ii) foreign ownership restrictions, (iii) foreign exchange, (iv) securities settlement and registration, (v) taxation, and (vi) depositories (including depository evaluation), if any.

2. To aid Customer in monitoring Country Risk, Bank shall furnish board the following additional information:

Market flashes, including with respect to changes in the information in market reports.

Schedule 2

ELIGIBLE SECURITIES DEPOSITORIES

Schedule A

List of Entities Covered by the Custody Agreement

JPMorgan Trust I

JPMorgan Emerging Markets Debt Fund

JPMorgan Bond Fund

JPMorgan Global Strategic Income Fund

JPMorgan Short Term Bond Fund

JPMorgan Enhanced Income Fund

JPMorgan California Tax Free Bond Fund

JPMorgan Intermediate Tax Free Bond Fund

JPMorgan New Jersey Tax Free Bond Fund

JPMorgan New York Tax Free Bond Fund

JPMorgan Tax Aware Short-Intermediate Income Fund

JPMorgan Tax Aware Disciplined Equity Fund

JPMorgan Tax Aware Enhanced Income Fund

JPMorgan Tax Aware U.S. Equity Fund

JPMorgan Tax Aware Large Cap Growth Fund

JPMorgan Tax Aware Large Cap Value Fund

JPMorgan Tax Aware International Opportunities Fund

JPMorgan Global Healthcare Fund

JPMorgan Market Neutral Fund

JPMorgan Emerging Markets Equity Fund

JPMorgan International Opportunities Fund

JPMorgan International Value Fund

JPMorgan Asia Equity Fund

JPMorgan Intrepid European Fund

JPMorgan International Growth Fund (beginning March 21, 2005)

JPMorgan International Small Cap Equity Fund

JPMorgan Japan Fund

JPMorgan International Equity Fund

JPMorgan Disciplined Equity Fund

JPMorgan Diversified Fund

JPMorgan U.S. Equity Fund

JPMorgan U.S. Small Company Fund

JPMorgan Capital Growth Fund (custody only until March 21, 2005)

JPMorgan Dynamic Small Cap Fund

JPMorgan Growth and Income Fund (custody only until March 21, 2005)

JPMorgan Mid Cap Equity Fund

JPMorgan Small Cap Core Fund

JPMorgan Small Cap Equity Fund

JPMorgan Value Advantage Fund

JPMorgan Intrepid America Fund

JPMorgan Intrepid Growth Fund

JPMorgan Intrepid Contrarian Fund

JPMorgan Intrepid Value Fund

JPMorgan 100% U.S. Treasury Securities Money Market Fund

JPMorgan California Municipal Money Market Fund

JPMorgan Federal Money Market Fund

JPMorgan New York Municipal Money Market Fund

JPMorgan Prime Money Market Fund

JPMorgan Tax Free Money Market Fund

Growth and Income Portfolio

Undiscovered Managers Funds

Undiscovered Managers Behavioral Growth Fund

Undiscovered Managers Behavioral Value Fund

Undiscovered Managers REIT Fund

Undiscovered Managers Small Cap Growth Fund

J.P. Morgan Mutual Fund Group

JPMorgan Short Term Bond Fund II

J.P. Morgan Fleming Mutual Fund Group, Inc.

JPMorgan Mid Cap Value Fund

J.P. Morgan Mutual Fund Investment Trust

JPMorgan Mid Cap Growth Fund

UM Investment Trust

UM Multi-Strategy Fund

UM Investment Trust II

Undiscovered Managers Spinnaker Fund

J.P. Morgan Series Trust II

JPMorgan Bond Portfolio

JPMorgan International Equity Portfolio

JPMorgan Mid Cap Value Portfolio

JPMorgan Small Company Portfolio

JPMorgan U.S. Large Cap Core Equity Portfolio

J.P. Morgan Fleming Series Trust

JPMorgan Multi-Manager Small Cap Growth Fund

JPMorgan Multi-Manager Small Cap Value Fund

JPMorgan Institutional Trust

JPMorgan Ultra Short-Term Bond Trust

JPMorgan Short-Term Bond Trust

JPMorgan Intermediate Bond Trust

JPMorgan Core Bond Trust

JPMorgan Equity Index Trust

JPMorgan Trust II

JPMorgan Small Cap Growth Fund

JPMorgan Small Cap Value Fund

JPMorgan Strategic Small Cap Value Fund

JPMorgan Diversified Mid Cap Growth Fund

JPMorgan Diversified Mid Cap Value Fund

JPMorgan Diversified Mid Cap Fund

JPMorgan Large Cap Growth Fund

JPMorgan Large Cap Value Fund

JPMorgan Equity Income Fund

JPMorgan Equity Index Fund

JPMorgan Market Expansion Index Fund

JPMorgan International Equity Index Fund

JPMorgan Technology Fund

JPMorgan Multi-Cap Market Neutral Fund

JPMorgan U.S. Real Estate Fund

JPMorgan Investor Growth Fund

JPMorgan Investor Growth & Income Fund

JPMorgan Investor Balanced Fund

JPMorgan Investor Conservative Growth Fund

JPMorgan Short Duration Bond Fund

JPMorgan Ultra Short Term Bond Fund

JPMorgan Intermediate Bond Fund

JPMorgan Core Bond Fund

JPMorgan Core Plus Bond Fund

JPMorgan Government Bond Fund

JPMorgan Treasury & Agency Fund

JPMorgan High Yield Bond Fund

JPMorgan Mortgage-Backed Securities Fund

JPMorgan Short Term Municipal Bond Fund

JPMorgan Tax Free Bond Fund

JPMorgan Municipal Income Fund

JPMorgan Arizona Municipal Bond Fund

JPMorgan Kentucky Municipal Bond Fund

JPMorgan Louisiana Municipal Bond Fund

JPMorgan Michigan Municipal Bond Fund

JPMorgan Ohio Municipal Bond Fund

JPMorgan West Virginia Municipal Bond Fund

JPMorgan Liquid Assets Money Market Fund

JPMorgan U.S. Government Money Market Fund

JPMorgan U.S. Treasury Plus Money Market Fund

JPMorgan Municipal Money Market Fund

JPMorgan Michigan Municipal Money Market Fund

JPMorgan Ohio Municipal Money Market Fund

SCHEDULE B

DESCRIPTION OF FUND ACCOUNTING SERVICES

The Bank agrees to perform the following duties in accordance with the requirements of the Funds’ Registration Statements, the 1940 Act (if applicable), applicable Internal Revenue Service (“IRS”) regulations, and procedures as may be agreed upon from time to time, including without limitation, those set forth in the service level agreement pertaining to the Funds to which the Bank is a party. In all instances, the Bank agrees to perform such services in accordance with industry standards and best practices, which may include those enumerated in the Audits of Investment Companies Audit and Accounting Guide, as in effect from time to time. Where appropriate, the Bank agrees to keep all records on a class-by-class basis for each of the Funds.

In connection with the provision of services under this Schedule B, the Bank or its agent or delegatee shall provide the Funds’ chief compliance officer with periodic reports (i.e., semi-annual SAS 70 reports) regarding its fund accounting control environment, and shall promptly provide special reports in the event of any material violation of the federal securities laws relating to such services of which it becomes aware. The Bank or its agent or delegatee will provide the Funds’ chief compliance officer with reasonable access to its compliance personnel.

The	Bank agrees to:

a.	keep and maintain the books and records of each Fund pursuant to Rule 31a-1 under the 1940 Act (the “Rule”), which are applicable to fund accounting and the services to be performed pursuant to this Schedule B, including the following:

(i)

journals containing an itemized daily record in detail of all purchases and sales of securities, all receipts and disbursements of cash and all other debits and credits, as required by subsection (b)(1) of the Rule;

(ii)

general and auxiliary ledgers reflecting all asset, liability, reserve, capital, income and expense accounts, including interest accrued and interest received, as required by subsection (b)(2)(i) of the Rule;

(iii)

separate ledger accounts required by subsections (b)(2)(ii) and (iii) of the Rule; and

(iv)

a monthly trial balance of all ledger accounts (except shareholder accounts) as required by subsection (b)(8) of the Rule.

b.	perform the following accounting services daily for each Fund:

(i)

calculate the net asset value per share;

(ii)

obtain security prices from independent pricing services, or if such quotes are unavailable, obtain such prices in accordance with the Valuation Procedures approved by a Fund’s Board;

(iii)

provide exception, stale and halted price reporting to the investment adviser;

(iv)

verify and reconcile with the Funds’ records all daily trade activity;

(v)

compute, as appropriate, each Fund’s net income and capital gains, dividend payables, dividend factors, 7-day yields, 7-day effective yields, 30-day yields, weighted average portfolio maturity and such other agreed-upon rates and yields;

(vi)

review daily the net asset value calculation and dividend factor (if any) for each Fund, check and confirm the net asset values and dividend factors for reasonableness and deviations against agreed-upon benchmarks and tolerance levels:

(vii)

distribute portfolio information, net asset values and yields to NASDAQ, the Funds’ transfer agent (the “Transfer Agent”), JPMorgan Funds Management, Inc. (“JPMFM”) and such other third parties as directed by Customer;

(viii)

report to JPMFM or its designee, at least weekly, about the daily market pricing of securities in any money market Funds, with the comparison to the amortized cost basis;

(ix)

determine unrealized appreciation and depreciation on securities held in variable net asset value Funds;

(x)

record all Corporate Actions affecting securities held by each Fund, including dividends, stock splits and recapitalizations;

(xi)

amortize premiums and accrete discounts on securities purchased at a price other than face value, if requested by a Customer or JPMFM;

(xii)

record and reconcile with the Transfer Agent all capital stock activity;

(xiii)

update Fund accounting system to reflect rate changes on variable interest rate instruments;

(xiv)

post Fund transactions to appropriate categories;

(xv)

accrue expenses of each Fund according to instructions received from JPMFM;

(xvi)

calculate book capital account balances;

(xvii)

maintain books and records;

(xviii)

determine the outstanding receivables and payables for all (1) security trades, (2) Fund share transactions and (3) income and expense accounts;

(xix)

provide accounting reports in connection with Customer’s regular annual audit and other audits and examinations by regulatory agencies; and

(xx)

provide such periodic reports as JPMFM or the Funds shall reasonably request.

In connection with the provision of these services, the Bank agrees:

(a)

to maintain, in a format acceptable to JPMFM and the Funds, documents in accordance with the applicable provisions of Rule 31a-2 of the 1940 Act and with requirements of other applicable domestic regulators, such as the IRS, or Applicable Foreign Regulators (as hereinafter defined). the Bank agrees to make such documents available upon reasonable request for inspection by officers, employees and auditors of JPMFM or the Funds during the Bank’s’s normal business hours. For purposes of this subclause (a), Applicable Foreign Regulator shall mean a foreign regulator designated as such by a Fund and a foreign regulator actually known to the Bank to have authority over a Fund or its operations. Promptly after the identification of a foreign regulator, appropriate representatives of the Bank and the Funds shall meet and determine the requirements to which the foreign regulator would subject such Fund. If the Bank and the Funds determine, in the exercise of their reasonable judgment, that complying with such requirements would impose a substantial additional burden on the Bank, the Funds and the Bank agree to negotiate in good faith, taking into account all relevant circumstances, an appropriate change in the fees payable hereunder;

(b)	that all records maintained and preserved by the Bankpursuant to this Agreement which each Fund is required to maintain and preserve shall be and remain the property of a Fund and

shall be surrendered to a Fund promptly upon request in the form in which such records have been maintained and preserved. Upon reasonable request of JPMFM or a Fund, the Bank shall provide, in the form reasonably requested by JPMFM or the Fund, any records included in any such delivery, and the Funds shall reimburse the Bank for its expenses of providing such records in such form;

(c)

to make reasonable efforts to determine (i) the taxable nature of any distribution or amount received by or deemed received by, or payable to, a Fund; (ii) the taxable nature or effect on a Fund or its shareholders of any corporate actions, class actions, tax reclaims or similar events; and (iii) taxable amount of any distribution or dividend paid, payable, or deemed paid by a Fund to its shareholders; subject to the following (w) with respect to determinations contemplated by this clause (c) that a prudent fund accountant would reasonably consider to be, and that the the Bank considers to be, non-routine in nature, the Bank may seek in writing the approval or authorization of a Fund or a designee of a Fund and shall not be required to act in respect of any such determination (as to which a written request for approval or authorization shall have been made) without such approval or authorization; (x) the Bank need not make any such accrual, unless and until such accrual has been approved and authorized by a Fund or its designee; (y) a Fund shall, or shall cause its designee, to provide such approval and authorization, or approval and authorization of different determinations(s), promptly; and (z) provided the Bank has made the reasonable efforts described in this clause (c) and thereafter has acted in accordance with the approvals and authorizations of a Fund or its designee, the Bank shall have no liability for any such accrual if it otherwise, in performing its services hereunder, is not in breach of this Agreement. The Bank shall accrue for these actions appropriately; and

(d)	to provide such records and assistance, including office space within the Bank’s premises, to the Funds’ independent accountants in connection with the services such accountants provide to the Funds, as such accountants shall reasonably request.

The parties further agree as follows with respect to the provision of services pursuant to this Schedule B:

(a)	The Bank may rely on each Fund’s then currently effective Prospectus, and JPMFM or each Fund shall promptly advise the Bank of any amendments thereto and provide copies of such amendments to the Bank.

(b)

Both the Bank and JPMFM or its designee shall use reasonable efforts to identify any changes in domestic and foreign laws and regulations applicable to the Bank’s providing of services under this Schedule B, and each shall promptly advise the other of any changes it identifies and upon any such identification the Bank and JPMFM (together with the Funds) shall agree on any reasonable alteration to the services to be provided to the Bank under this Schedule B.

(c)

A Fund or its designee shall (i) furnish promptly to the Bank (and the Bank may rely upon) the amounts of, or written formulas or methodologies to be used by the Bank to calculate the amounts of, Fund liabilities and (ii) specify the timing for accruals of such liabilities. The Bank shall request such additional information as it deems reasonably necessary for it to perform its services under this Schedule B.

(d)	The Bank shall not be required to include as Fund liabilities and expenses, nor use in its calculations hereunder, including, without limitation, as a reduction of net asset value, any accrual for any U.S. federal or state income taxes, unless and until JPMFM or its designee

shall have specified to the Bank the precise amount of the same to be included in liabilities and expenses or used to reduce net asset value. The Bank agrees to include as a Fund liability proper accruals for foreign taxes, unless, after being advised of the amount and the basis for the accrual, JPMFM by Instructions directs the Bank not to do so.

(e)

JPMFM or its designee shall furnish to the Bank, and the Bank may rely upon, the following types of information (and explanations thereof): (i) each Fund’s tax basis in debt obligations acquired by a Fund before the Bank’s becoming fund accountant hereunder, the dates of such acquisitions, and the amount of premium previously amortized and the discount previously included in income, (ii) the amounts credited to any capital accounts, (iii) the amount of any reserves, and (iv) similar information which is required by the Bank for performing the services and is neither possessed by the Bank nor available from a third party.

(f)

The Bank shall not be responsible for, and shall not incur any loss or liability with respect to: any errors or omissions in information supplied by a Fund or its designee that the Bank has reviewed and has concluded to be within reasonable tolerance limits, as agreed between the parties; any improper use by a Fund, its designees, agents, distributor or investment adviser of any valuations or computations supplied by the Bank under this Agreement; any valuations of securities supplied by a Fund or an independent pricing service approved by such Fund’s Board (if applicable), provided that, with respect to such valuations, the Bank has otherwise complied with this Schedule B, has reviewed the valuations and has concluded they are within reasonable tolerance limits agreed to by the parties; any tax determination authorized and approved by a Fund or its designee that the Bank has reviewed and has concluded is within reasonable tolerance limits as agreed to by the parties; or any changes in U.S. law or regulations applicable to the Bank’s performance not identified by the Bank’s use of reasonable efforts which are not identified to the Bank by a Fund.

SCHEDULE C

JPMorgan Chase Bank

Global Investor Services

Fee Schedule for JPMorgan Investment Management North America

Fund Accounting and Custody Services

The following schedules are applicable to 40 Act Funds, Commingled Funds and 3c-7 Funds

Custody Fee Schedule

Custody Safekeeping Fees


	BPS	Trades
Argentina	25.00	100.00
Australia	5.00	50.00
Austria	8.00	50.00
Bahrain	60.00	150.00
Bangladesh	60.00	150.00
Belgium	5.00	50.00
Bermuda	20.00	75.00
Botswana	60.00	150.00
Brazil	15.00	58.00
Bulgaria	35.00	75.00
Canada (RBC)	3.00	25.00
Chile	35.00	75.00
China	25.00	75.00
Colombia	40.00	100.00
Costa Rica	60.00	150.00
Croatia	40.00	115.00
Cyprus	60.00	150.00
Czech Republic	40.00	90.00
Denmark	4.00	50.00
ECU	1.50	24.00
Ecuador	50.00	100.00
Egypt	40.00	75.00
Estonia	35.00	75.00
Euroclear/Cedel	1.75	23.00
Euro CDs	1.00	23.00
Finland	5.00	50.00
France	3.00	47.00
Germany	2.00	27.00
Ghana	60.00	150.00
Greece	40.00	75.00
Hong Kong	4.00	50.00
Hungary	40.00	100.00
India	25.00	45.00
Indonesia	10.00	75.00


	BPS	Trades
Ireland	7.00	45.00
Israel	50.00	100.00
Italy	5.00	50.00
Ivory Coast	3.00	100.00
Jamaica	11.00	70.00
Japan	1.50	25.00
Jersey	60.00	150.00
Jordan	50.00	100.00
Kenya	60.00	150.00
Korea	20.00	48.00
Latvia	20.00	115.00
Lebanon	50.00	140.00
Lithuania	35.00	140.00
Luxembourg	3.00	50.00
Malaysia	8.00	75.00
Mauritius	60.00	150.00
Mexico	6.00	42.00
Morocco	50.00	150.00
Namibia	60.00	150.00
Nepal	60.00	150.00
Netherlands	4.00	50.00
New Zealand	2.00	47.00
Nigeria	60.00	150.00
Norway	6.00	50.00
Oman	35.00	130.00
Pakistan	30.00	150.00
Peru	50.00	100.00
Philippines	15.00	83.00
Poland	40.00	150.00
Portugal	25.00	83.00
Romania	40.00	115.00
Russia	25.00	100.00
Singapore	4.00	50.00
Slovakia	40.00	100.00
Slovenia	35.00	100.00
South Africa	5.00	50.00
Spain	7.75	50.00
Sri Lanka	20.00	100.00
Swaziland	60.00	150.00
Sweden	5.00	50.00
Switzerland	5.00	75.00
Taiwan	13.00	100.00
Thailand	15.00	63.00
Tunisia	60.00	150.00


	BPS	Trades
Turkey	20.00	75.00
United Kingdom	0.45	25.00
United States	0.10	See Below
Uruguay	60.00	150.00
Venezuela	35.00	100.00
Vietnam	60.00	150.00
Zambia	60.00	150.00
Zimbabwe	50.00	115.00


*United States Billable Transaction Fees:*

• DTC/FBE Trades:		$7.50 per trade

• Automated Physical Trades:		$20.00 per trade

• Manual Physical Trades:		$20.00 per trade

• Physical Redemption:		$7.00 per trade

• Physical P&I:		$7.00 per trade

*Non-Billable Transactions:*

• Automated P&I Payment

• Cash Transactions

• Interest/Dividend Transaction

Out of Pocket Fees:

•

Passed-through as incurred (e.g. stamp duty, registration fees, scrip fees, etc.).

•

New markets or additional services required that are not included in this schedule will be negotiated separately and added to this schedule as the need arises.

Fund Accounting Fee Schedule

The following schedule shall be employed in the calculation of the fees payable for the services provided under this Agreement. For purposes of determining the asset levels at which a Tier applies, assets for that fund type across the entire JPMorgan Funds Complex (which shall be defined to include any 1940 Act fund, commingled funds or Rule 3c-7 fund which is advised or subadvised by an entity which is a subsidiary of JPMorgan & Co.) shall be used.

Money Markets:


Tier One	$	5,000,000,000	1.10	Bps
Tier Two	$	10,000,000,000	0.80	Bps
Tier Three	$	35,000,000,000	0.40	Bps
Tier Four		Over $35BN	0.20	Bps

Fixed Income:


Tier One	$	10,000,000,000	1.00	Bps
Tier Two	$	20,000,000,000	0.75	Bps
Tier Three	$	30,000,000,000	0.50	Bps
Tier Four		Over $30BN	0.25	Bps

Domestic Equity:


Tier One	$	10,000,000,000	1.20	Bps
Tier Two	$	20,000,000,000	0.50	Bps
Tier Three	$	30,000,000,000	0.40	Bps
Tier Four		Over $30BN	0.25	Bps

International Funds:


Tier One	$	10,000,000,000	3.00	Bps
Tier Two		Over $10BN	2.50	Bps

Emerging Markets:


Tier One	$	10,000,000,000	4.00	Bps
Tier Two		Over $10BN	3.00	Bps

Other Fees:


Minimums:	US Equity	$	20,000
	US Fixed Income	$	20,000
	Money Markets	$	10,000
	International	$	25,000
	Emerging Markets	$	40,000
	Additional Share Classes	$	2,000
	Multi-Manager (per manager)	$	6,000

Fund minimums will apply only for Funds that have commenced operations.

Out of Pocket Accounting Fees:

Pricing costs will be passed through as incurred.

Schedule A

List of Entities Covered by the Custody and Fund Accounting Agreement

(Amended as of August 11, 2005)

JPMorgan Trust I

JPMorgan Emerging Markets Debt Fund

JPMorgan Bond Fund

JPMorgan Global Strategic Income Fund

JPMorgan Short Term Bond Fund

JPMorgan Enhanced Income Fund

JPMorgan California Tax Free Bond Fund

JPMorgan Intermediate Tax Free Bond Fund

JPMorgan New Jersey Tax Free Bond Fund

JPMorgan New York Tax Free Bond Fund

JPMorgan Tax Aware Short-Intermediate Income Fund

JPMorgan Tax Aware Disciplined Equity Fund

JPMorgan Tax Aware Enhanced Income Fund

JPMorgan Tax Aware U.S. Equity Fund

JPMorgan Tax Aware Large Cap Growth Fund

JPMorgan Tax Aware Large Cap Value Fund

JPMorgan Tax Aware International Opportunities Fund

JPMorgan Global Healthcare Fund

JPMorgan Market Neutral Fund

JPMorgan Emerging Markets Equity Fund

JPMorgan International Opportunities Fund

JPMorgan International Value Fund

JPMorgan Asia Equity Fund

JPMorgan Intrepid European Fund

JPMorgan International Growth Fund (beginning March 21, 2005)

JPMorgan International Small Cap Equity Fund

JPMorgan Japan Fund

JPMorgan International Equity Fund

JPMorgan Disciplined Equity Fund

JPMorgan Diversified Fund

JPMorgan U.S. Equity Fund

JPMorgan U.S. Small Company Fund

JPMorgan Capital Growth Fund (custody only until March 21, 2005)

JPMorgan Dynamic Small Cap Fund

JPMorgan Growth and Income Fund (custody only until March 21, 2005)

JPMorgan Mid Cap Equity Fund

JPMorgan Small Cap Core Fund

JPMorgan Small Cap Equity Fund

JPMorgan Value Advantage Fund

JPMorgan Intrepid America Fund

JPMorgan Intrepid Growth Fund

JPMorgan Intrepid Contrarian Fund

JPMorgan Intrepid Value Fund

JPMorgan 100% U.S. Treasury Securities Money Market Fund

JPMorgan California Municipal Money Market Fund

JPMorgan Federal Money Market Fund

JPMorgan New York Municipal Money Market Fund

JPMorgan Prime Money Market Fund

JPMorgan Tax Free Money Market Fund

JPMorgan Tax Aware Core Equity Fund

JPMorgan Tax Aware Diversified Equity Fund

JPMorgan Tax Aware International Fund

JPMorgan Tax Aware Real Return Fund

JPMorgan Real Return Fund

JPMorgan U.S. Large Cap Core Plus Fund (effective 9/30/05)

JPMorgan Micro Cap Fund (effective 10/31/05)

Undiscovered Managers Funds

Undiscovered Managers Behavioral Growth Fund

Undiscovered Managers Behavioral Value Fund

Undiscovered Managers REIT Fund

Undiscovered Managers Small Cap Growth Fund

J.P. Morgan Mutual Fund Group

JPMorgan Short Term Bond Fund II

J.P. Morgan Fleming Mutual Fund Group, Inc.

JPMorgan Mid Cap Value Fund

J.P. Morgan Mutual Fund Investment Trust

JPMorgan Growth Advantage Fund (JPMorgan Mid Cap Growth until 8/17/05)

UM Investment Trust

Undiscovered Managers Multi-Strategy Fund (UM Multi-Strategy Fund until 8/22/05)

UM Investment Trust II

Undiscovered Managers Spinnaker Fund

J.P. Morgan Series Trust II

JPMorgan Bond Portfolio

JPMorgan International Equity Portfolio

JPMorgan Mid Cap Value Portfolio

JPMorgan Small Company Portfolio

JPMorgan U.S. Large Cap Core Equity Portfolio

J.P. Morgan Fleming Series Trust

JPMorgan Multi-Manager Small Cap Growth Fund

JPMorgan Multi-Manager Small Cap Value Fund

JPMorgan Institutional Trust

JPMorgan Ultra Short-Term Bond Trust

JPMorgan Short-Term Bond Trust

JPMorgan Intermediate Bond Trust

JPMorgan Core Bond Trust

JPMorgan Equity Index Trust

JPMorgan Trust II

JPMorgan Small Cap Growth Fund

JPMorgan Small Cap Value Fund

JPMorgan Strategic Small Cap Value Fund

JPMorgan Diversified Mid Cap Growth Fund

JPMorgan Diversified Mid Cap Value Fund

JPMorgan Intrepid Mid Cap Fund (formerly JPMorgan Diversified Mid Cap Fund until 7/29/05)

JPMorgan Large Cap Growth Fund

JPMorgan Large Cap Value Fund

JPMorgan Equity Income Fund

JPMorgan Equity Index Fund

JPMorgan Market Expansion Index Fund

JPMorgan International Equity Index Fund

JPMorgan Technology Fund

JPMorgan Multi-Cap Market Neutral Fund

JPMorgan U.S. Real Estate Fund

JPMorgan Investor Growth Fund

JPMorgan Investor Growth & Income Fund

JPMorgan Investor Balanced Fund

JPMorgan Investor Conservative Growth Fund

JPMorgan Short Duration Bond Fund

JPMorgan Ultra Short Term Bond Fund

JPMorgan Intermediate Bond Fund

JPMorgan Core Bond Fund

JPMorgan Core Plus Bond Fund

JPMorgan Government Bond Fund

JPMorgan Treasury & Agency Fund

JPMorgan High Yield Bond Fund

JPMorgan Mortgage-Backed Securities Fund

JPMorgan Short Term Municipal Bond Fund

JPMorgan Tax Free Bond Fund

JPMorgan Municipal Income Fund

JPMorgan Arizona Municipal Bond Fund

JPMorgan Kentucky Municipal Bond Fund

JPMorgan Louisiana Municipal Bond Fund

JPMorgan Michigan Municipal Bond Fund

JPMorgan Ohio Municipal Bond Fund

JPMorgan West Virginia Municipal Bond Fund

JPMorgan Liquid Assets Money Market Fund

JPMorgan U.S. Government Money Market Fund

JPMorgan U.S. Treasury Plus Money Market Fund

JPMorgan Municipal Money Market Fund

JPMorgan Michigan Municipal Money Market Fund

JPMorgan Ohio Municipal Money Market Fund


JPMorgan Trust I
JPMorgan Trust II
Undiscovered Managers Funds
J.P. Morgan Mutual Fund Group
J.P. Morgan Fleming Mutual Fund Group, Inc.
J.P. Morgan Mutual Fund Investment Trust
UM Investment Trust
UM Investment Trust II
J.P. Morgan Series Trust II
J.P. Morgan Fleming Series Trust
JPMorgan Institutional Trust

By:

Name:

Title:

Date:


JPMorgan Chase Bank, N.A.

By:

Name:

Title:

Date:

EX-99.H.1 4 dex99h1.htm TRANSFER AGENCY AGREEMENT Transfer Agency Agreement

Exhibit (h)(1)

TRANSFER AGENCY AGREEMENT

Made as of the 19th day of February, 2005

by and between

EACH OF THE ENTITIES LISTED ON EXHIBIT A HERETO

And

BOSTON FINANCIAL DATA SERVICES, INC.

TABLE OF CONTENTS



Documents to be Filed with Appointment		3

Certain Representations and Warranties of BOSTON FINANCIAL		4

Certain Representations and Warranties of the Trust		5

Scope of Appointment		5

Limit of Authority		8

Compensation and Expenses		9

Operation of the TA2000^TM System		11

Indemnification		14

Certain Covenants of BOSTON FINANCIAL and the Trust		17

Recapitalization or Readjustment		19

Certificates		20

Death, Resignation or Removal of Signing Officer		20

Future Amendments of Declaration of Trust and Bylaws		20

Instructions, Opinion of Counsel and Signatures		20

Force Majeure and Disaster Recovery Plans		21

Certification of Documents		22

Records		22

Disposition of Books, Records and Canceled Certificates		22

Provisions Relating to BOSTON FINANCIAL as Transfer Agent		23

Provisions Relating to Dividend Disbursing Agency		25

Assumption of Duties By the Trust or Agents Designated By the Trust		26

Termination of Agreement		26

Confidentiality and Information Security		28

Changes and Modifications		30

Assignment and Subcontractors		31

Limitations on Liability		32

Miscellaneous		32

Exhibit A - Fee Schedule
Exhibit B - Authorized Personnel

Appendix A

TRANSFER AGENCY AGREEMENT

THIS AGREEMENT made as of the 19th day of February, 2005, by and between each of the entities listed on Appendix A hereto and each being an entity of the type set for on Appendix A and organized under the laws of the state as set forth on such Appendix, each with a principal place of business at 522 5th Ave., New York, NY 10036 and each of which is acting on its own behalf and on behalf of each of the portfolios listed under its name in Appendix A (jointly and severally, such portfolios shall be referred to hereinafter as the “Fund” or “Funds), but not jointly with any other entities listed on Appendix A and BOSTON FINANCIAL DATA SERVICES, INC., a corporation existing under the laws of the Commonwealth of Massachusetts, having its principal place of business at 2 Heritage Drive, North Quincy, Massachusetts 02171 (“BOSTON FINANCIAL”):

WITNESSETH:

WHEREAS, each Trust (as used hereinafter, the term “Trust” shall refer jointly and severally to the trust entities set forth on Appendix A hereto, and to each Fund listed in Appendix A, as the context requires) is a Massachusetts or Delaware business trust or Maryland corporation registered with the Securities and Exchange Commission as an investment company pursuant to the Investment Company Act of 1940, as amended, which currently consists of the Funds listed under its name on Appendix A; and

WHEREAS, the Trust desires to appoint BOSTON FINANCIAL as Transfer Agent and Dividend Disbursing Agent for all common shares of beneficial interest of each Fund of each Trust and, of shares of common stock of each Fund of each corporation (the “Shares”), and BOSTON FINANCIAL desires to accept such appointment;

NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows:

1.	DOCUMENTS TO BE FILED WITH APPOINTMENT.

In connection with the appointment of BOSTON FINANCIAL as Transfer Agent and Dividend Disbursing Agent for the Trust, there will be filed with BOSTON FINANCIAL the following documents:

A. A certified copy of the votes of the Board of Trustees of the Trust appointing BOSTON FINANCIAL as Transfer Agent and Dividend Disbursing Agent, approving the form of this Agreement, and designating certain persons to sign Shares certificates (“Certificates”), if any, and give written instructions and requests on behalf of the Trust;

B. A certified copy of the Declaration of Trust or other organizational documents of the Trust and all amendments thereto;

C. A certified copy of the Bylaws of the Trust;

D. Copies of Registration Statements and amendments thereto, filed with the Securities and Exchange Commission;

E. Specimens of all forms of outstanding Certificates;

F. Specimens of the signatures of the officers of the Trust authorized to sign Certificates and individuals authorized to sign written instructions and requests;

G. An opinion of counsel for the Trust with respect to:

(1) The Trust’s organization and existence under the laws of its state of organization,

(2) The status of all Shares, whether unissued or evidenced by Certificates of the Trust, covered by the appointment under the Securities Act of 1933, as amended, (the “33 Act”) (to the extent applicable) and any other applicable federal or state statute, and

(3) That all issued Shares are, and all unissued Shares will be when issued, validly issued, fully paid and non-assessable.

2.	CERTAIN REPRESENTATIONS AND WARRANTIES OF BOSTON FINANCIAL.

BOSTON FINANCIAL represents and warrants to the Trust that:

A. It is a corporation duly organized and existing and in good standing under the laws of the Commonwealth of Massachusetts.

B. It is duly qualified to carry on its business in the Commonwealth of Massachusetts.

C. It is empowered under applicable laws and by its Articles of Organization and Bylaws to enter into and perform the services contemplated in this Agreement.

D. It is registered as a transfer agent to the extent required under the Securities Exchange Act of 1934, as amended, (the “34 Act”) and it will remain so registered for the duration of this Agreement. It will promptly notify the Trust in the event of any material change in its status as a registered transfer agent. Should BOSTON FINANCIAL fail to be registered with the appropriate federal agency as a transfer agent at any time during this Agreement, the Trust may, on written notice to BOSTON FINANCIAL, immediately terminate this Agreement.

E. All requisite corporate proceedings have been taken to authorize it to enter into and perform this Agreement.

F. It has and will continue to have and maintain the necessary facilities, equipment personnel, policies and procedures to effectively perform its duties and obligations under this Agreement and under the laws applicable to its business and services.

G. It will perform its obligations in compliance with industry standards and the laws applicable to its business and services.

3.	CERTAIN REPRESENTATIONS AND WARRANTIES OF THE TRUST.

The Trust represents and warrants to BOSTON FINANCIAL that:

A. It is a business trust or corporation duly organized and existing and in good standing under the laws of the state of its organization as set forth on Appendix A.

B. The Trust and each Fund set forth on Appendix A is an investment company registered under the Investment Company Act of 940, as amended.

C. A registration statement under the ‘33 Act has been filed and will be effective with respect to all Shares offered for sale. Except to the extent that the Trust notifies BOSTON FINANCIAL that such Trust is not required to be registered under the ‘33 Act.

D. All requisite steps have been and will continue to be taken to register the Shares for sale in all applicable states and such registration will be effective at all times Shares are offered for sale in such state.

E. The Trust is empowered under applicable laws and by its Declaration of Trust (or other organizational documents if applicable) and Bylaws to enter into and perform this Agreement.

4.	SCOPE OF APPOINTMENT.

A. Subject to the conditions and termination of provisions set forth in this Agreement, the Trust hereby appoints BOSTON FINANCIAL as Transfer Agent and Dividend Disbursing Agent for the Shares and for the Shares of future portfolios of the Trust (Appendix I shall be automatically deemed to be revised to include such future portfolio(s)).

B. BOSTON FINANCIAL hereby accepts such appointment and agrees that it will act as the Trust’s Transfer Agent and Dividend Disbursing Agent. BOSTON FINANCIAL agrees that it will also act as agent in connection with the Trust’s periodic withdrawal payment accounts and other open accounts or similar plans for shareholders, if any.

C. The Trust agrees to use its best efforts to deliver to BOSTON FINANCIAL in Quincy, Massachusetts, as soon as they are available, all of its shareholder account records for any new Fund of the Trust.

D. BOSTON FINANCIAL, utilizing TA2000^TM, a computerized data processing system for securityholder accounting (the “TA2000^TM System”) licensed from BOSTON FINANCIAL’s affiliate, DST Systems, Inc. (“DST”), will perform the following services as transfer and dividend disbursing agent for the Trust, and as agent of the Trust for shareholder accounts thereof, in a timely manner: (i) issuing (including countersigning), transferring and canceling Certificates; (ii) maintaining all shareholder accounts; (iii) providing transaction journals; (iv) once annually preparing shareholder meeting lists for use in connection with the annual meeting and certifying the shareholder votes of the Trust; (v) mailing shareholder reports and prospectuses; (vi) withholding, as required by federal law, taxes on shareholder accounts, disbursing income dividends and capital gains distributions to shareholders, preparing, filing and mailing U.S. Treasury Department Forms 1099, 1042, and 1042S and performing and paying backup withholding as required for all shareholders; (vii) preparing and mailing confirmation forms to shareholders and dealers, as instructed, for all purchases and liquidations of shares of the Trust and other transactions in shareholders’ accounts requiring confirmation under applicable law; (viii) recording reinvestment of dividends and distributions in Shares; (ix) providing or making available on-line daily and monthly reports as both are regularly provided by the TA2000^TM System and as requested by the Trust or its management company; (x) maintaining those records necessary to carry out BOSTON FINANCIAL’s duties hereunder, including all information reasonably required by the Trust to account for all transactions in the Shares, (xi) calculating the appropriate sales charge with respect to each purchase of the Shares as set forth in the prospectus for the Trust, determining the portion of each sales charge payable to the dealer participating in a sale in accordance with schedules delivered to BOSTON FINANCIAL by the Trust’s principal underwriter or distributor (hereinafter “principal underwriter”) from time to time, disbursing dealer commissions collected to such dealers, determining the portion of each sales charge payable to such principal underwriter and disbursing such commissions to the principal underwriter; (xii) receiving correspondence pertaining to any former, existing or new shareholder account, processing such correspondence for proper recordkeeping, and responding promptly to shareholder correspondence; (xiii) mailing to dealers confirmations of wire order trades; mailing copies of shareholder statements to shareholders and dealers in accordance with the Trust’s instructions; (xiv) processing, generally on the date of receipt, purchases or redemptions or instructions to settle any mail or wire order purchases or redemptions received in proper order as set forth in the prospectus, rejecting promptly any requests not received in proper order (as defined by the Trust, the Trust’s agents or prospectus, or the Procedures, as hereinafter defined), and causing exchanges of shares to be executed in accordance with the Trust’s instructions and prospectus, the Procedures and the general exchange privilege applicable; (xv) operating the order desk on behalf of the Trust for the purpose of taking trade orders from broker-dealers and institutions, confirming orders on “T+1” (Trade Date Plus One), monitoring the settlement of such orders and advising the Trust once such orders become delinquent based upon the Trust’s guidelines; and (xvi) monitoring “as of’s” and advising

broker-dealers of the necessity to reimburse the Trust when the as of loss from a transaction exceeds the thresholds established by the Trust.

E. At the request of Trust, BOSTON FINANCIAL shall use reasonable efforts to provide the services set forth in Section 4.D. other than through BOSTON FINANCIAL’s usual methods and procedures to utilize the TA2000 System, that is by performing services requiring more manual intervention by BOSTON FINANCIAL, either in the entry of data or in the modification or amendment of reports generated by the TA2000 System, or where information is provided to BOSTON FINANCIAL after the commencement of the nightly processing cycle of the TA2000 System, thereby decreasing the effective time for performance by BOSTON FINANCIAL (the “Exception Services”).

F. BOSTON FINANCIAL shall use reasonable efforts to provide, reasonably promptly under the circumstances, the same services with respect to any new, additional functions or features or any changes or improvements to existing functions or features as provided for in the Trust’s instructions, prospectus or application as amended from time to time, for the Trust; provided (i) BOSTON FINANCIAL is advised in advance by the Trust of any changes therein and (ii) the TA2000^TM System and the mode of operations utilized by BOSTON FINANCIAL, as then constituted, supports such additional functions and features. If any addition to, improvement of or change in the features and functions currently provided by the TA2000^TM System or the operations as requested by the Trust requires an enhancement or modification to the TA2000^TM System or to operations as presently conducted by BOSTON FINANCIAL, BOSTON FINANCIAL shall not be liable therefor until such modification or enhancement is installed on the TA2000^TM System or new mode of operation is instituted. If any new, additional function or feature or change or improvement to existing functions or features or new service or mode of operation requested by the Trust (and which is not covered by Section 24 of this Agreement) measurably increases BOSTON FINANCIAL’s cost of performing the services required hereunder at the current level of service, BOSTON FINANCIAL shall advise the Trust of the amount of such increase and if the Trust elects to utilize such function, feature or service, BOSTON FINANCIAL shall be entitled to increase its fees by the amount of the increase in costs. In no event shall BOSTON FINANCIAL be responsible for or liable to provide any additional function, feature, improvement or change in method of operation requested by the Trust until it has consented thereto in writing.

G. The Trust shall have the right to add all new Funds of the Trust to the TA2000^TM System, provided that the Trust provides BOSTON FINANCIAL with at least thirty (30) days’ prior written notice and provided, further, that the requirements of the new series are generally consistent with services then being provided by BOSTON FINANCIAL under this Agreement. Rates or charges for additional Funds shall be as set forth in Exhibit A, as hereinafter defined, for the remainder of the contract term except as such Fund uses functions, features or characteristics for which BOSTON FINANCIAL has imposed an additional charge as part of its standard pricing schedule. In the latter event,

rates and charges shall be in accordance with BOSTON FINANCIAL’s then-standard pricing schedule.

H. BOSTON FINANCIAL shall maintain a quality control process designed to provide a consistent level of quality and timeliness for its transaction processing. BOSTON FINANCIAL’s performance of the Services under this Agreement will be measured against service level standards (“SLAs”), which will be established in good faith by mutual written agreement of the parties and shall be made a part of this Agreement as Schedule 4.H once completed and agreed to by all parties. Following the establishment and implementation of the SLAs, BOSTON FINANCIAL shall provide to the Trust, a monthly report with respect to BOSTON FINANCIAL’s processing against the SLAs. In order that BOSTON FINANCIAL may reasonably estimate the staffing needed to maintain the SLAs, the Trust agrees to use its best efforts to communicate to BOSTON FINANCIAL all sales and volume projections prior to the beginning of each quarter and to provide the BOSTON FINANCIAL with advance notice of any product development, sales or marketing campaigns that the Trust determines may materially impact the volume of transactions in the Funds. The parties agree to work together to resolve any performance issues in good faith. The parties annually shall review and discuss the SLAs and shall make such changes therein as to which they mutually agree. The parties agree that the SLAs shall not apply to, and shall not be calculated for, any particular day when: (i) the TA2000™ System or any computer hardware or software, which is substantially required for the performance of the Services, is unavailable for more than sixty (60) minutes, provided that such unavailability is beyond BOSTON FINANCIAL’s reasonable control and BOSTON FINANCIAL notifies the Trust promptly of such unavailability; (ii) there is a failure or unavailability of communication lines outside of BOSTON FINANCIAL’s facilities; (iii) there is a disaster that requires BOSTON FINANCIAL to process at its disaster recovery site or when BOSTON FINANCIAL’s transaction processing is impeded by an event described in Section 15 hereof; or (iv) the failure to perform is caused by third parties (including the Trust) whose actions are beyond BOSTON FINANCIAL’s reasonable control.

5.	LIMIT OF AUTHORITY.

Unless otherwise expressly limited by the resolution of appointment or by subsequent action by the Trust, the appointment of BOSTON FINANCIAL as Transfer Agent will be construed to cover the full amount of authorized Shares of the class or classes for which BOSTON FINANCIAL is appointed as the same will, from time to time, be constituted, and any subsequent increases in such authorized amount.

In case of such increase the Trust will file with BOSTON FINANCIAL:

A. If the appointment of BOSTON FINANCIAL was theretofore expressly limited, a certified copy of a resolution of the Board of Trustees of the Trust increasing the authority of BOSTON FINANCIAL;

B. A certified copy of the amendment to the Declaration of Trust of the Trust authorizing the increase of stock;

C. A certified copy of the order or consent of each governmental or regulatory authority required by law to consent to the issuance of the increased stock, or an opinion of counsel that the order or consent of no other governmental or regulatory authority is required;

D. Opinion of counsel for the Trust stating:

(1) The status of the additional Shares of the Trust under the `33 Act and any other applicable federal or state statute; and

(2) That the additional shares are, or when issued will be, validly issued, fully paid and non-assessable.

6.	COMPENSATION AND EXPENSES.

A. In consideration for its services hereunder as Transfer Agent and Dividend Disbursing Agent, the Trust will pay to BOSTON FINANCIAL, from time to time, a reasonable compensation for all services rendered as Agent and, also, all BOSTON FINANCIAL’s reasonable billable out-of-pocket expenses or disbursements (“Compensation and Expenses”) incurred in connection with the agency. “Expenses” are more fully described in Section 6.B. of this Agreement. Such Compensation and Expenses are set forth in a separate schedule previously agreed to by the Trust and BOSTON FINANCIAL, a copy of which is attached hereto as Exhibit A. If the Trust has not paid such Compensation and Expenses to BOSTON FINANCIAL within a reasonable time, BOSTON FINANCIAL may charge against any monies held under this Agreement, the amount of any Compensation and Expenses for which it shall be entitled to reimbursement under this Agreement.

B. The Trust also agrees promptly to reimburse BOSTON FINANCIAL for all reasonable billable out-of-pocket expenses or disbursements incurred by BOSTON FINANCIAL in connection with the performance of services under this Agreement including, but not limited to: expenses for postage; express delivery services; freight charges; envelopes, checks, drafts, forms (continuous or otherwise); specially requested reports and statements; telephone calls; telegraphs; stationery supplies; counsel fees incurred in connection with the review of the legal sufficiency of documentation provided by a shareholder or otherwise as to the advisability of complying with the request or instruction of a shareholder or person purporting to act on behalf of a shareholder (provided that BOSTON FINANCIAL provides the Trust with reasonable advance notice of any such request and permits the Trust to elect to undertake its own review of the legal sufficiency of such documentation or as to the advisability of complying with such request or instruction); outside printing and mailing firms (including DST Output, Inc. and its affiliates (“DST Output”);

magnetic tapes, reels or cartridges (if sent to the Trust or to a third party at the Trust’s request) and magnetic tape handling charges; off-site record storage and media for storage of records (e.g., microfilm, microfiche, optical platters, computer tapes); computer equipment installed at the Trust’s request at the Trust’s or a third party’s premises; telecommunications equipment and telephone/telecommunication lines between the Trust and its agents, on one hand, and BOSTON FINANCIAL on the other; proxy soliciting, processing and/or tabulating costs; transmission of statement data for remote printing or processing other than by DST Output (at a charge of .035/record); and National Securities Clearing Corporation (“NSCC”) transaction fees to the extent any of the foregoing are paid or incurred by BOSTON FINANCIAL. The Trust agrees to pay postage expenses at least one day in advance if so requested. In addition, any other expenses incurred by BOSTON FINANCIAL at the request or with the consent of the Trust will be promptly reimbursed by the Trust.

C. Amounts due hereunder shall be due and paid on or before the sixtieth (60th) calendar day after receipt of the invoice therefor by the Trust (the “Due Date”). The Trust is aware that its failure to pay all amounts in a timely fashion so that they will be received by BOSTON FINANCIAL on or before the Due Date will give rise to costs to BOSTON FINANCIAL not contemplated by this Agreement, including but not limited to carrying, processing and accounting charges. Accordingly, subject to Section 6.D. hereof, in the event that during any twelve (12) month period the Trust pays any four (4) or more of its invoices after their respective Due Dates, then BOSTON FINANCIAL may charge and the Trust shall pay a late charge for any future invoices paid after the applicable Due Date and such late charge shall be equal to the lesser of the maximum amount permitted by applicable law or the London Interbank Overnight Rate times the amount overdue, times the number of days from the Due Date up to and including the day on which payment is received by BOSTON FINANCIAL. The parties hereby agree that such late charge represents a fair and reasonable computation of the costs incurred by reason of late payment or payment of amounts not properly due. Acceptance of such late charge shall in no event constitute a waiver of the Trust’s or BOSTON FINANCIAL’s default or prevent the non-defaulting party from exercising any other rights and remedies available to it.

D. In the event that any charges are disputed, the Trust shall, on or before the Due Date, pay all undisputed amounts due hereunder and notify BOSTON FINANCIAL in writing of any disputed charges for billable expenses that it is disputing in good faith. Payment for such disputed charges shall be due on or before the close of the fifth (5th) business day after the day on which BOSTON FINANCIAL provides to the Trust documentation which an objective observer would agree reasonably supports the disputed charges (the “Revised Due Date”). Late charges shall not begin to accrue as to charges disputed in good faith until the first business day after the Revised Due Date.

E. The fees and charges set forth on Exhibit A shall increase or may be increased as follows:

(1) On the first day of each anniversary of this Agreement, subject to Note E of Exhibit A;

(2) BOSTON FINANCIAL may increase the fees and charges set forth on Exhibit A upon at least ninety (90) days prior written notice, if changes in existing laws, rules or regulations: (i) require substantial system modifications or (ii) materially increase BOSTON FINANCIAL’s cost of performance hereunder;

(3) BOSTON FINANCIAL may charge for additional features of TA2000 used by the Trust which features are not consistent with the Trust’s current processing requirements; and

(4) In the event BOSTON FINANCIAL, at the Trust’s request or direction, performs Exception Services, BOSTON FINANCIAL shall be entitled to increase the fees and charges for such Exception Services from those set forth on Exhibit A to the extent such Exception Services increase BOSTON FINANCIAL’s cost of performance. This provision shall not apply to the Exception Services, if any, being provided as of the date of this Agreement, which the parties shall mutually agree upon and set forth on Schedule 6.E.(4) to this Agreement.

If BOSTON FINANCIAL notifies the Trust of an increase in fees or charges pursuant to subparagraph (2) of this Section 6.E., the parties shall confer, diligently and in good faith and agree upon a new fee to cover the amount necessary, but not more than such amount, to reimburse BOSTON FINANCIAL for the Trust’s aliquot portion of the cost of developing the new software to comply with regulatory charges and for the increased cost of operation.

If BOSTON FINANCIAL notifies the Trust of an increase in fees or charges under subparagraphs (3) or (4) of this Section 6.E., the parties shall confer, diligently and in good faith, and agree upon a new fee to cover such new Trust feature.

7.	OPERATION OF THE TA2000™ SYSTEM.

In connection with the performance of its services under this Agreement, BOSTON FINANCIAL is responsible for such items as:

A. That entries in BOSTON FINANCIAL’s records, and in the Trust’s records on the TA2000™ System created by BOSTON FINANCIAL and BOSTON FINANCIAL’s affiliates, accurately reflect the orders, instructions, and other information received by BOSTON FINANCIAL and such affiliates from the Trust, the Trust’s distributor, manager or principal underwriter, or any successor of any of the foregoing (all hereinafter referred to as “JPM”) and its affiliates, entities from whom JPM or the Trust have directed BOSTON FINANCIAL to accept orders, instructions or other

information, the Trust’s investment adviser, banks or other entities which BOSTON FINANCIAL has been advised by the Trust or JPM are affiliated with or a correspondent of JPM, or the Trust’s administrator (each of the foregoing being an “Authorized Person”), broker-dealers or shareholders (existing or new). BOSTON FINANCIAL has currently been instructed, by way of example and not limitation, to accept telephone instructions from any person reasonably believed by BOSTON FINANCIAL to be a representative of an Authorized Person, to accept third party checks initiated by or received from or through a broker/dealer or a JPM-customer relationship, to accept transactions and documentation by fax in accordance with the guidelines established by an Authorized Person, to allow corporations, partnerships, trusts and other accounts not registered in the name of a single individual and individually owned accounts to have telephone or “VOICE” transaction processing privileges (the “Privileges”), to establish Privileges on all accounts unless the establishing shareholder explicitly directs that telephone exchanges and redemptions not be permitted and to accept and to effectuate transmissions and trades entered on a remote basis by JPM and banks affiliated with JPM (without verification of the contents of such transmissions and trades);

B. That shareholder lists, shareholder account verifications, confirmations and other shareholder account information to be produced from its records or data be available and accurately reflect the data in the Trust’s records on the TA2000^™ System;

C. The accurate and timely issuance of dividend and distribution checks in accordance with instructions received from the Trust and the data in the Trust’s records on the TA2000^™ System;

D. That redemption transactions and payments be effected timely, to be processed under normal circumstances on the day of receipt, and accurately in accordance with redemption instructions received by BOSTON FINANCIAL from Authorized Persons, broker-dealers or shareholders and the data in the Trust’s records on the TA2000^™ System;

E. The deposit daily in the Trust’s appropriate special bank account of all checks and payments received by BOSTON FINANCIAL from NSCC, broker-dealers or shareholders for investment in shares;

F. Notwithstanding anything herein to the contrary, with respect to “as of” adjustments, BOSTON FINANCIAL will not assume one hundred percent (100%) responsibility for losses resulting from “as of’s” due to clerical errors or misinterpretations of shareholder instructions, but BOSTON FINANCIAL will discuss with the Fund BOSTON FINANCIAL’s accepting liability for an “as of” on a case-by-case basis and will accept financial responsibility for a particular situation resulting in a financial loss to the Fund where such loss is “material”, as hereinafter defined, and, under the particular facts at issue, BOSTON FINANCIAL’s conduct was culpable and BOSTON FINANCIAL’s conduct is the sole cause of the loss. A loss is “material” for purposes of this Section 7.F. when it results in a pricing error on a particular transaction which is (i) greater

than a negligible amount per shareholder, (ii) equals or exceeds one ($.01) full cent per share times the number of shares outstanding or (iii) equals or exceeds the product of one-half of one percent (1/2%) times the Fund’s Net Asset Value per share times the number of shares outstanding (or, in case of (ii) or (iii), such other amounts as may be adopted by applicable accounting or regulatory authorities from time to time). If the net effect of the “as of” transactions that are determined to be caused by BOSTON FINANCIAL is negative and exceeds the above limit, then BOSTON FINANCIAL shall promptly contact the Trust and the Fund accountants. BOSTON FINANCIAL will work with the Trust and the Fund accountants to determine what, if any, impact the threshold break has on the Fund’s Net Asset Value and what, if any, further action is required. These further actions may include but are not limited to, the Fund re-pricing the affected day(s), BOSTON FINANCIAL re-processing, at its expense, all affected transactions in the Fund that took place during the period or a payment to the Fund. The Fund agrees to work in good faith with BOSTON FINANCIAL and wherever possible, absent a regulatory prohibition or other mutually agreed upon reason, the Fund agrees to re-price the affected day(s) and to allow BOSTON FINANCIAL to re-process the affected transactions. When such re-pricing and re-processing is not possible, and when BOSTON FINANCIAL must contribute to the settlement of a loss, BOSTON FINANCIAL’s responsibility will commence with that portion of the loss over $0.0049 per share calculated on the basis of the total value of all shares owned by the affected portfolio (i.e., on the basis of the value of the shares of the total portfolio, including all classes of that portfolio, not just those of the affected class) and BOSTON FINANCIAL will make such account adjustments and take such other action as is necessary to compensate shareholders for shareholder losses and reimburse the Fund for the amount of Fund losses in accordance with the foregoing standards. If BOSTON FINANCIAL contributes to the settlement of a loss, the amount paid by BOSTON FINANCIAL shall be deducted from the amount of any accumulated losses calculated in the fiscal year monitoring process described below. BOSTON FINANCIAL will monitor all portfolios across share classes to determine the accumulated gain or loss effect of “as-of trades” caused solely by the transfer agent. At the fiscal year end of each portfolio, if the portfolio has an accumulated loss across share classes that is attributed to the transfer agent, then BOSTON FINANCIAL shall pay to the Fund the amount of such loss in excess of $.0049 per share calculated on the basis of the total value of all shares owned by the affected portfolio (i.e., on the basis of the value of the shares of the total portfolio, including all classes of that portfolio, not just those of the affected class). If at the end of the fiscal year, a portfolio has accumulated a gain across share classes, that gain will remain with the Fund.

G. The requiring of proper forms of instructions, signatures and signature guarantees and any necessary documents supporting the opening of shareholder accounts, transfers, redemptions and other shareholder account transactions, all in conformance with BOSTON FINANCIAL’s present procedures as set forth in its Legal Manual (collectively the “Procedures”) with such changes or deviations therefrom as may be from time to time required or approved by the Trust, its investment adviser or principal underwriter, or its or BOSTON FINANCIAL’s counsel and the rejection of orders or

instructions not in good order in accordance with the applicable prospectus or the Procedures; and

H. The maintenance of a current, duplicate set of the Trust’s essential records at a secure separate location, in a form available and usable forthwith in the event of any breakdown or disaster disrupting its main operation.

8.	INDEMNIFICATION.

A. BOSTON FINANCIAL shall at all times use reasonable care, due diligence and act in good faith in performing its duties under this Agreement and agrees to use its best efforts within reasonable limits to insure the accuracy of all services performed under this Agreement. BOSTON FINANCIAL shall provide its services hereunder in accordance with the ‘34 Act, and other laws, rules and regulations of governmental authorities having jurisdiction over BOSTON FINANCIAL. In the absence of bad faith, willful misconduct, knowing or reckless violations of applicable law pertaining to the manner in which transfer agency services are to be performed by BOSTON FINANCIAL (excluding any violations arising directly or indirectly out of the actions or omissions to act of third parties unaffiliated with BOSTON FINANCIAL), reckless disregard of the performance of its duties, or negligence on its part, BOSTON FINANCIAL shall not be liable for any action taken, suffered, or omitted by it or for any error of judgment made by it in the performance of its duties under this Agreement. For those activities or actions delineated in the Procedures, BOSTON FINANCIAL shall be presumed to have used reasonable care, due diligence and acted in good faith if it has acted in accordance with the Procedures, copies of which have been provided to the Trust and reviewed and approved by the Trust’s counsel, as amended from time to time with approval of Trust’s counsel, or for any deviation therefrom approved by the Trust or BOSTON FINANCIAL counsel.

B. BOSTON FINANCIAL shall not be responsible for, and the Trust shall indemnify and hold BOSTON FINANCIAL harmless from and against, any and all losses, damages, reasonable costs, reasonable charges, reasonable counsel fees, payments, reasonable expenses and liability (the “Adverse Consequences”) which may be asserted against BOSTON FINANCIAL or for which BOSTON FINANCIAL may be held to be liable, arising out of or attributable to:

(1) All actions of BOSTON FINANCIAL required to be taken by BOSTON FINANCIAL pursuant to this Agreement, provided that BOSTON FINANCIAL has acted in good faith and with due diligence and reasonable care;

(2) The Trust’s refusal or failure to comply with the terms of this Agreement, the Trust’s negligence or willful misconduct, or the breach of any representation or warranty of the Trust hereunder;

(3) The good faith reliance on, or the carrying out of, any written or oral instructions or requests of persons designated by the Trust in writing (see Exhibit B) from time to

time as authorized to give instructions on its behalf or representatives of an Authorized Person or BOSTON FINANCIAL’s good faith reliance on, or use of, information, data, records and documents received from, or which have been prepared and/or maintained by the Trust, its investment advisor, its sponsor or its principal underwriter;

(4) Defaults by dealers or shareowners with respect to payment for share orders previously entered;

(5) The offer or sale of Shares in violation of any requirement under federal securities laws or regulations or the securities laws or regulations of any state or in violation of any stop order or other determination or ruling by any federal agency or state with respect to the offer or sale of such shares in such state (unless such violation results from BOSTON FINANCIAL’s failure to comply with written instructions of the Trust or of any officer of the Trust that no offers or sales be input into the Trust’s securityholder records in or to residents of such state);

(6) Any error or mistake of the Trust, any Authorized Person, and any agent designated by the Trust in the use of the TA2000^™ System, the data center, computer and related equipment used to access the TA2000^™ System (the “DST Facilities”), and control procedures relating thereto in the verification of output and in the remote input of data;

(7) Errors, inaccuracies, and omissions in, or errors, inaccuracies or omissions of BOSTON FINANCIAL arising out of or resulting from such errors, inaccuracies and omissions in, the Trust’s records, shareholder and other records, delivered to BOSTON FINANCIAL hereunder by the Trust or its prior agent(s);

(8) Actions or omissions to act by the Trust or agents designated by the Trust with respect to duties assumed thereby as provided for in Section 21 hereof; and

(9) BOSTON FINANCIAL’s performance of Exception Services except where BOSTON FINANCIAL acted or omitted to act in bad faith, with reckless disregard of its obligations or with negligence.

(10) The Trust’s breach or violation of the Ethical Hack Guidelines (as hereinafter defined) of BOSTON FINANCIAL and/or its affiliates.

C. Except where BOSTON FINANCIAL is entitled to indemnification under Section 8.B. hereof and with respect to “as of’s” set forth in Section 7.F., BOSTON FINANCIAL shall indemnify and hold the Trust harmless from and against any and all Adverse Consequences arising out of BOSTON FINANCIAL’s failure to comply with the terms of this Agreement or arising out of or attributable to BOSTON FINANCIAL’s negligence, willful misconduct or reckless disregard of its obligations under this Agreement or BOSTON FINANCIAL’s breach of any of its representations or warranties under this Agreement. In the event that any claim is asserted against BOSTON FINANCIAL under this Agreement for any reason other than BOSTON

FINANCIAL’s bad faith or willful misconduct, BOSTON FINANCIAL’s aggregate liability during any term of this Agreement with respect to, arising from or arising in connection with this Agreement, or from all services provided or omitted to be provided under this Agreement, whether in contract, or in tort, or otherwise, shall be limited and shall be determined as set forth on Schedule 8.C. attached hereto.

D. EXCEPT FOR INTENTIONAL MALEVOLENT VIOLATIONS¹ OF SECTION 23, IN NO EVENT AND UNDER NO CIRCUMSTANCES SHALL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO ANYONE, INCLUDING, WITHOUT LIMITATION TO THE OTHER PARTY, FOR CONSEQUENTIAL DAMAGES FOR ANY ACT OR FAILURE TO ACT UNDER ANY PROVISION OF THIS AGREEMENT EVEN IF ADVISED OF THE POSSIBILITY THEREOF.

E. Promptly after receipt by an indemnified person of notice of the commencement of any action, such indemnified person will, if a claim in respect thereto is to be made against an indemnifying party hereunder, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying Party will not relieve an indemnifying party from any liability that it may have to any indemnified person for contribution or otherwise under the indemnity agreement contained herein except to the extent it is prejudiced as a proximate result of such failure to timely notify. In case any such action is brought against any indemnified person and such indemnified person seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to participate in, and, to the extent that it may wish, assume the defense thereof (in its own name or in the name and on behalf of any indemnified party or both with counsel reasonably satisfactory to such indemnified person); provided, however, if the defendants in any such action include both the indemnified person and an indemnifying party and the indemnified person shall have reasonably concluded that there may be a conflict between the positions of the indemnified person and an indemnifying party in conducting the defense of any such action or that there may be legal defenses available to it and/or other indemnified persons which are inconsistent with those available to an indemnifying party, the indemnified person or indemnified persons shall have the right to select one separate counsel (in addition to local counsel) to assume such legal defense and to otherwise participate in the defense of such action on behalf of such indemnified person or indemnified persons at such indemnified party’s sole expense. Upon receipt of notice from an indemnifying party to such indemnified person of its election so to assume the defense of such action and approval by the indemnified person of counsel, which approval shall not be unreasonably withheld (and any disapproval shall be accompanied by a written statement of the reasons therefor), the indemnifying party will not be liable to such indemnified person hereunder for any legal or other expenses subsequently incurred by such indemnified person in connection with the defense thereof. An indemnifying party will not settle or compromise or consent to the entry of

For purposes of Schedule 8.C. and Section 8.D, “intentional malevolent violations” shall mean those acts undertaken purposefully under circumstances in which the person acting knows or has reason to believe that such act violates such person’s obligations under this Agreement and is likely to cause danger or harm to the other party or its shareholders.

any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified persons are actual or potential parties to such claim, action, suit or proceeding) unless such settlement, compromise or consent includes an unconditional release of each indemnified person from all liability arising out of such claim, action, suit or proceeding. An indemnified party will not, without the prior written consent of the indemnifying party, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder. If it does so, it waives its right to indemnification therefor.

F. In any case an indemnifying person may be asked to indemnify or save an indemnified person harmless, the indemnified person shall use reasonable care to (i) fully and promptly advise the indemnifying person of all pertinent facts concerning the situation in question, and (ii) timely advise the indemnifying person of any matter as to which the indemnified person is aware that a claim which may give rise to Adverse Consequences has been asserted or is being threatened and appears reasonably likely to be asserted.

9.	CERTAIN COVENANTS OF BOSTON FINANCIAL AND THE TRUST.

A. All requisite steps will be taken by the Trust from time to time when and as necessary to register the Shares for sale in all states in which the Shares shall at the time be offered for sale and require registration. If at any time the Trust receives notice of any stop order or other proceeding in any such state affecting such registration or the sale of the Shares, or of any stop order or other proceeding under the federal securities laws affecting the sale of the Shares, the Trust will give prompt notice thereof to BOSTON FINANCIAL.

B. BOSTON FINANCIAL hereby agrees to perform such transfer agency functions as are set forth in Section 4.D. above, to establish and to maintain facilities and procedures reasonably acceptable to the Trust for safekeeping of Certificates, check forms, and facsimile signature imprinting devices, if any, and for the preparation or use, and the keeping account of, such Certificates, forms and devices, and to carry such insurance as BOSTON FINANCIAL considers adequate and reasonably available, such consideration to be consistent with standards of commercial reasonableness.

C. To the extent required by Section 31 of the Investment Company Act of 1940, as amended, and Rules thereunder, BOSTON FINANCIAL agrees that all records maintained by BOSTON FINANCIAL relating to the services to be performed by BOSTON FINANCIAL under this Agreement are the property of the Trust and will be preserved and will be surrendered promptly to the Trust on request.

D. BOSTON FINANCIAL agrees to furnish the Trust with a report in accordance with Statements on Auditing Standards No. 70 (the “SAS 70 Report”) as well as such other publicly available financial information about itself or its affiliates and any reports and

information relating to BOSTON FINANCIAL’s policies and procedures and its compliance with such policies and procedures and with the laws applicable to its business and services as the Trust may reasonably request. BOSTON FINANCIAL further agrees that upon request by the Trust, not more than once each year, it will review with the Trust such information as is necessary to demonstrate BOSTON FINANCIAL’s current financial status. As a continuing obligation of BOSTON FINANCIAL throughout the term of this Agreement, BOSTON FINANCIAL agrees to notify the Trust (unless legally prohibited from so doing) of any claims that BOSTON FINANCIAL reasonably believes would materially adversely affect the ability of BOSTON FINANCIAL to provide the services required under this Agreement.

E. BOSTON FINANCIAL represents and agrees that it will use its best efforts within reasonable limits to keep current on the trends of the investment company industry relating to shareholder services and will use its best efforts to continue to modernize and improve. Notwithstanding the foregoing, (i) BOSTON FINANCIAL shall not be liable for failing to make any modification or improvement as to the necessity of which the Trust has not advised BOSTON FINANCIAL in writing and (ii) for any delay in the implementation of such modification or improvement where BOSTON FINANCIAL reasonably requires more time than was permitted by circumstances or such regulations.

F. BOSTON FINANCIAL will permit the Trust and its authorized representatives, including its chief compliance officer, to make periodic inspections of its operations and its policies and procedures as such would involve the Trust at reasonable times during business hours subject to such authorized representatives’ execution of a confidentiality agreement provided by BOSTON FINANCIAL.

G. BOSTON FINANCIAL agrees to use its best efforts to provide in Kansas City, MO at the Trust’s expense two (2) man weeks of training for designated personnel in connection with use and operation of the TA2000^™ System for the Trust. All travel and reimbursable expenses incurred by the Trust’s personnel in connection with and during training at BOSTON FINANCIAL’s Facility or DST’s Facility shall be borne by the Trust. At the Trust’s option and expense, BOSTON FINANCIAL also agrees to use its best efforts to provide an additional two (2) man weeks of training at the Trust’s facility for the Trust’s personnel in connection with the conversion to the TA2000^™ System. Reasonable travel, per diem and reimbursable expenses incurred by BOSTON FINANCIAL personnel in connection with and during training at the Trust’s facility or in connection with the conversion shall be borne by the Trust.

H. BOSTON FINANCIAL shall reasonably cooperate with the Trust’s independent public accountants and the Trust’s chief compliance officer and shall take all reasonable action in the performance of its obligations under this Agreement to assure that access to all readily necessary information and compliance personnel is made available to such accountants and to the Trust’s chief compliance officer, for the expression of the accountants’ opinion and the evaluation of the effectiveness of BOSTON

FINANCIAL’s compliance controls, as such may be required from time to time. Special reports or information may be charged for. A report is “Special” if it is not regularly produced by TA2000^™ or requires special programming.

I. Ethical Hack. The parties have agreed that the Trust may conduct an Ethical Hack, as part of the Trust’s normal information security due diligence review and compliance solely in accordance with the Ethical Hack Guidelines or BOSTON FINANCIAL and/or its affiliates (the “Ethical Hack Guidelines”) a copy of which are attached hereto and incorporated herein by reference as if fully set forth as Exhibit E. The Trust agrees that any such Ethical Hack shall be performed strictly in accordance with such Ethical Hack Guidelines. If vulnerabilities are identified, then as part of the Services BOSTON FINANCIAL and/or its affiliates shall promptly (i) document the system remediation proposal, (ii) provide the Trust with such documentation and reports on the status of modifications to correct such vulnerabilities, and (iii) implement such remediation modifications as may be required.

J. BOSTON FINANCIAL will provide assistance to and cooperate with the Trust during any government or Trust directed audits (including audits arranged by the Trust in connection with the implementation and administration of the Trust’s compliance policies and procedures) and regulatory examinations of the Trust’s records and accounts maintained by BOSTON FINANCIAL in accordance with reasonable procedures and at reasonable frequencies. For purposes of such regulatory examinations or audits, at the request the Trust, BOSTON FINANCIAL will make available, during normal business hours, all reasonably required records, data and operating processes for review by (i) the representatives of the appropriate regulatory agencies and/or (ii) any auditors. The Trust understands and agrees that all auditors will be required by BOSTON FINANCIAL to execute a confidentiality agreement prior to being given access to such records, data and operating processes.

K. Upon request of the Trust, BOSTON FINANCIAL will provide to the Trust on a semi-annual or quarterly basis a Sarbanes-Oxley certification with respect to BOSTON FINANCIAL’s performance of the services and its internal controls related thereto. In addition, upon request of the Trust, BOSTON FINANCIAL will provide to the Trust a certification under Rule 38a-1 of the federal securities rules with respect to the compliance provisions required by that Rule.

10.	RECAPITALIZATION OR READJUSTMENT.

In case of any recapitalization, readjustment or other change in the capital structure of the Trust requiring a change in the form of Certificates, BOSTON FINANCIAL will issue or register Certificates in the new form in exchange for, or in transfer of, the outstanding Certificates in the old form, upon receiving:

A. Written instructions from an officer of the Trust;

B. Certified copy of the amendment to the Declaration of Trust or other document effecting the change;

C. Certified copy of the order or consent of each governmental or regulatory authority, required by law to the issuance of the stock in the new form, and an opinion of counsel that the order or consent of no other government or regulatory authority is required;

D. Specimens of the new Certificates in the form approved by the Board of Trustees of the Trust, with a certificate of the Secretary of the Trust as to such approval;

E. Opinion of counsel for the Trust stating:

(1) The status of the shares of stock of the Trust in the new form under the ‘33 Act, as amended and any other applicable federal or state statute; and

(2) That the issued shares in the new form are, and all unissued shares will be when registered, validly issued, fully paid and nonassessable.

11.	CERTIFICATES.

The Trust will furnish BOSTON FINANCIAL with a sufficient supply of blank Certificates and from time to time will renew such supply upon the request of BOSTON FINANCIAL. Such Certificates will be signed manually or by facsimile signatures of the officers of the Trust authorized by law and by bylaws to sign Certificates, and if required, will bear the corporate seal or facsimile thereof.

12.	DEATH, RESIGNATION OR REMOVAL OF SIGNING OFFICER.

The Trust will file promptly with BOSTON FINANCIAL written notice of any change in the officers authorized to sign Certificates, written instructions or requests, together with a revised Exhibit B. In case any officer of the Trust who will have signed manually or whose facsimile signature will have been affixed to blank Certificates will die, resign, or be removed prior to the issuance of such Certificates, BOSTON FINANCIAL may issue or register such Certificates as the Certificates of the Trust notwithstanding such death, resignation, or removal, until specifically directed to the contrary by the Trust in writing. In the absence of such direction, the Trust will file promptly with BOSTON FINANCIAL such approval, adoption, or ratification as may be required by law.

13.	FUTURE AMENDMENTS OF DECLARATION OF TRUST AND BYLAWS.

The Trust will promptly file with BOSTON FINANCIAL copies of all material amendments to its Declaration of Trust or Bylaws made after the date of this Agreement.

14.	INSTRUCTIONS, OPINION OF COUNSEL AND SIGNATURES.

Any time BOSTON FINANCIAL shall be in doubt as to any proposed or requested action to be taken or omitted by it, BOSTON FINANCIAL may consult with any person authorized by the

Trust to give instructions to BOSTON FINANCIAL relating to the particular proposed or requested action to be taken or omitted. BOSTON FINANCIAL may with the approval of a Trust officer consult with legal counsel for the Trust or may consult with BOSTON FINANCIAL’s own legal counsel at BOSTON FINANCIAL’s own expense, with respect to any matter involving a question of law involved in any action to be taken or omitted by BOSTON FINANCIAL in connection with the agency. BOSTON FINANCIAL will not be liable for any action taken or omitted by it in good faith in reliance upon such instructions or upon the opinion of such counsel. Notwithstanding the foregoing, the Trust shall reimburse BOSTON FINANCIAL for outside counsel fees incurred in connection with the review of the legal sufficiency of documentation provided by a shareholder or otherwise as to the advisability of complying with the request of a shareholder or person purporting to act on behalf of a shareholder so long as BOSTON FINANCIAL has complied with the requirements set forth in Section 6.B. BOSTON FINANCIAL will be protected in acting upon any paper or document reasonably believed by it to be genuine and to have been signed by the proper person or persons and will not be held to have notice of any change of authority of any person, until receipt of written notice thereof from the Trust. It will also be protected in recognizing Certificates which it reasonably believes to bear the proper manual or facsimile signatures of the officers of the Trust, and the proper countersignature of any former Transfer Agent or Registrar, or of a co-Transfer Agent or co-Registrar.

15.	FORCE MAJEURE AND DISASTER RECOVERY PLANS.

A. BOSTON FINANCIAL shall not be responsible or liable for its failure or delay in performance of its obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation: any interruption, loss or malfunction or any utility, transportation, computer (hardware or software) or communication service; a delay in mails; governmental or exchange action, statute, ordinance, rulings, regulations or direction; war, strike, riot, emergency, civil disturbance, terrorism, vandalism, explosions, labor disputes, freezes, floods, fires, tornadoes, acts of God or public enemy, revolutions, or insurrection; or any other cause, contingency, circumstance or delay not subject to BOSTON FINANCIAL’s reasonable control which prevents or hinders BOSTON FINANCIAL’s performance hereunder.

B. BOSTON FINANCIAL will maintain a comprehensive business continuity plan and will provide an executive summary of such plan upon reasonable request of the Trust. BOSTON FINANCIAL will test the adequacy of its business continuity plan at least annually and upon request, the Trust may participate in such test. Upon request by the Trust, BOSTON FINANCIAL will provide the Trust with a letter assessing the most recent business continuity test results. In the event of a business disruption that materially impacts BOSTON FINANCIAL’s provision of services under this Agreement, BOSTON FINANCIAL will notify the Trust of the disruption and the steps being implemented under the business continuity plan. If the Trust reasonably determines that BOSTON FINANCIAL has not or cannot put its disaster recovery plan in place quickly enough to meet the Trust’s needs or is otherwise unable to provide equal access to such Services, BOSTON FINANCIAL shall promptly provide reasonable assistance and support to the Trust, at the Trust’s expense, in seeking such services from an alternative source.

C. BOSTON FINANCIAL’s affiliate, DST, currently maintains a recovery facility for use in event of a disaster rendering the DST Facilities inoperable (the “DST Recovery Facility”). DST has developed and is continually revising business contingency plans (the “DST Business Contingency Plan”) detailing which, how, when, and by whom data maintained at DST Facilities will be installed and operated at the Recovery Facility. BOSTON FINANCIAL will provide an executive summary of the DST Business Contingency Plan upon reasonable request of the Trust. Provided the Trust is paying its pro rata portion of the charge therefor, BOSTON FINANCIAL would, in event of a disaster rendering the DST’s Facility inoperable, instruct DST to use reasonable efforts to convert the TA2000^™ System containing the designated Trust data to the computers at the Recovery Facility in accordance with the then current DST Business Contingency Plan.

D. BOSTON FINANCIAL also currently maintains, separate from the area in which the operations that provides the services to the Trust hereunder are located, a Crisis Management Center consisting of phones, computers and the other equipment necessary to operate a full service transfer agency business in the event one of its operations areas is rendered inoperable. The transfer of operations to other operating areas or to the Crisis Management Center is covered in BOSTON FINANCIAL’s Business Contingency Plan.

16.	CERTIFICATION OF DOCUMENTS.

The required copy of the Declaration of Trust or Articles of Incorporation of the Trust and copies of all amendments thereto will be certified by the Secretary of State (or other appropriate official) of the State of Incorporation, and if such Declaration of Trust and amendments are required by law to be also filed with a county, city or other officer of official body, a certificate of such filing will appear on the certified copy submitted to BOSTON FINANCIAL, provided, however, that if the Trust is not required to file the Declaration of Trust with the State of Incorporation, but is required to file a Certificate of Trust with such state, a copy of the Certificate of Trust and copies of all amendment thereto will be certified by the Secretary of State (or other appropriate official) of the State of Incorporation. A copy of the order or consent of each governmental or regulatory authority required by law to the issuance of the stock will be certified by the Secretary or Clerk of such governmental or regulatory authority, under proper seal of such authority. The copy of the Bylaws and copies of all amendments thereto, and copies of resolutions of the Board of Trustees of the Trust, will be certified by the Secretary or an Assistant Secretary of the Trust under the Trust’s seal.

17.

RECORDS.

BOSTON FINANCIAL will maintain customary records in connection with its agency, and particularly will maintain those records required to be maintained pursuant to subparagraph (2) (iv) of paragraph (b) of Rule 31a-1 under the Investment Company Act of 1940, if any.

18.	DISPOSITION OF BOOKS, RECORDS AND CANCELED CERTIFICATES.

BOSTON FINANCIAL may send periodically to the Trust, or to where designated by the Secretary or an Assistant Secretary of the Trust, all books, documents, and all records no longer

deemed needed for current purposes and Certificates which have been canceled in transfer or in exchange, upon the understanding that such books, documents, records, and Certificates will be maintained by the Trust under and in accordance with the requirements of Rule 17Ad-7 adopted under the ‘34. Such materials will not be destroyed by the Trust without the consent of BOSTON FINANCIAL (which consent will not be unreasonably withheld), but will be safely stored for possible future reference.

19.	PROVISIONS RELATING TO BOSTON FINANCIAL AS TRANSFER AGENT.

A. BOSTON FINANCIAL will make original issues of Certificates upon written request of an officer of the Trust and upon being furnished with a certified copy of a resolution of the Board of Trustees authorizing such original issue, an opinion of counsel as outlined in subparagraphs 1.G and 5.D of this Agreement, any documents required by Sections 5 or 10 of this Agreement, and necessary funds for the payment of any original issue tax.

B. Before making any original issue of Certificates of the Trust will furnish BOSTON FINANCIAL with sufficient funds to pay all required taxes on the original issue of the stock, if any. The Trust will furnish BOSTON FINANCIAL such evidence as may be required by BOSTON FINANCIAL to show the actual value of the stock. If no taxes are payable BOSTON FINANCIAL will be furnished with a certified statement from an officer of the Trust to that effect.

C. Shares of stock represented by Certificates will be transferred and new Certificates issued in transfer, or Shares of stock accepted for redemption and funds remitted therefor, or book entry transfer be effected, upon surrender of the old Certificates in form or receipt by BOSTON FINANCIAL of instructions deemed by BOSTON FINANCIAL properly endorsed for transfer or redemption accompanied by such documents as BOSTON FINANCIAL may deem necessary to evidence the authority of the person making the transfer or redemption. BOSTON FINANCIAL reserves the right to refuse to transfer or redeem Shares until it is satisfied that the endorsement or signature on the Certificate or any other document is valid and genuine, and for that purpose it may require a guaranty of signature in accordance with the Procedures. BOSTON FINANCIAL will incur no liability and shall be indemnified and held harmless by the Fund for any action taken by it in accordance with an instruction bearing what purports to be a signature guarantee or medallion of an Eligible Guarantor Institution or otherwise in accordance with BOSTON FINANCIAL’s Signature Guarantee Procedures adopted pursuant to Rule 17Ad-15 under the ‘34 Act. BOSTON FINANCIAL also reserves the right to refuse to transfer or redeem shares until BOSTON FINANCIAL is satisfied that the requested transfer or redemption is legally authorized, and it will incur no liability for the refusal in good faith to make transfers or redemptions which, in its reasonable judgment, are improper or unauthorized. Authority to perform a redemption shall be suspended when the Trust suspends the shareholders’ right of redemption provided that the Trust delivers written notice of such suspension to BOSTON FINANCIAL. BOSTON FINANCIAL may, in effecting transfers or redemptions, rely upon Simplification Acts, Uniform Commercial Code or other statutes

that protect it and the Trust in not requiring complete fiduciary documentation. In cases in which BOSTON FINANCIAL is not directed or otherwise required to maintain the consolidated records of shareholder’s accounts, BOSTON FINANCIAL will not be liable for any loss that may arise by reason of not having such records.

D. When mail is used for delivery of Certificates, BOSTON FINANCIAL will forward Certificates in “nonnegotiable” form by first class or registered mail and Certificates in “negotiable” form by registered mail, all such mail deliveries to be covered while in transit to the addressee by insurance arranged for by BOSTON FINANCIAL.

E. BOSTON FINANCIAL will issue and mail subscription warrants, Certificates representing stock dividends, exchanges or split ups, or act as Conversion Agent upon receiving written instructions from any officer of the Trust and such other documents as BOSTON FINANCIAL deems necessary.

F. BOSTON FINANCIAL will issue, transfer, and split up Certificates and will issue Certificates of stock representing full Shares upon surrender of scrip certificates aggregating one full share or more when presented to BOSTON FINANCIAL for that purpose upon receiving written instructions from an officer of the Trust and such other documents as BOSTON FINANCIAL may deem necessary.

G. BOSTON FINANCIAL may issue new Certificates in place of Certificates represented to have been lost, destroyed, stolen or otherwise wrongfully taken upon receiving instructions from the Trust and indemnity satisfactory to BOSTON FINANCIAL and the Trust, and may issue new Certificates in exchange for, and upon surrender of, mutilated Certificates. Such instructions from the Trust will be in such form as will be approved by the Board of Trustees of the Trust and will be in accordance with the provisions of law and the bylaws of the Trust governing such matter.

H. BOSTON FINANCIAL will supply a shareholder’s list to the Trust for its annual meeting upon receiving a request from an officer of the Trust. It will also, at the expense of the Trust, supply lists at such other times as may be requested by an officer of the Trust.

I. Upon receipt of written instructions of an officer of the Trust, BOSTON FINANCIAL will, at the expense of the Trust, address and mail notices to shareholders.

J. In case of any request or demand for the inspection of the securityholder files or stock books of the Trust or any other books or records in the possession of the Trust in BOSTON FINANCIAL’s possession, BOSTON FINANCIAL will not permit such inspection, except (i) after prior notification to and approval in writing by the Trust or Advisor as appropriate, which approval shall not be unreasonably withheld and may not be withheld or delayed where BOSTON FINANCIAL may be exposed to civil or criminal contempt proceedings for failure to comply when requested to divulge such information by duly constituted authorities, or (ii) when so requested by the Trust or an Authorized Person. Nothing in the foregoing is intended to, nor does it, prohibit or deny

to BOSTON FINANCIAL the right to disclose information requested by subpoena, Court Order, administrative order or request issued by a federal, state or local authority purporting to be issued under statutory authority or a self-regulatory organization registered under the ‘34 Act. BOSTON FINANCIAL shall use reasonable efforts to advise the Trust concerning subpoenas received for records of the Trust and, upon being so advised, the Trust shall be responsible for handling and responding thereto.

K. If the Trust elects to delegate to BOSTON FINANCIAL certain Anti-Money Laundering and customer identification duties under this Agreement, the parties will agree to such duties and terms as stated in the attached schedule (“Schedule 19 K. entitled “AML Delegation” which may be changed from time to time subject to mutual written agreement between the parties. In consideration of the performance of the duties by BOSTON FINANCIAL pursuant to this Section 19 K., the Trust agrees to pay BOSTON FINANCIAL the fees applicable to such services as the parties may from time to time agree.

20.	PROVISIONS RELATING TO DIVIDEND DISBURSING AGENCY.

A. BOSTON FINANCIAL will, at the expense of the Trust, provide a special form of check containing the imprint of any device or other matter desired by the Trust. Said checks must, however, be of a form and size convenient for use by BOSTON FINANCIAL.

B. If the Trust desires to include additional printed matter, financial statements, etc., with the dividend checks, the same will be furnished BOSTON FINANCIAL within a reasonable time prior to the date of mailing of the dividend checks, at the expense of the Trust.

C. If the Trust desires its distributions mailed in any special form of envelopes, sufficient supply of the same will be furnished to BOSTON FINANCIAL but the size and form of said envelopes will be subject to the approval of BOSTON FINANCIAL. If stamped envelopes are used, they must be furnished by the Trust; or if postage stamps are to be affixed to the envelopes, the stamps or the cash necessary for such stamps must be furnished by the Trust.

D. BOSTON FINANCIAL shall establish and maintain, and is hereby authorized to establish and to maintain, under the usual terms and conditions prevalent in the industry and on behalf of the Trust as agent of the Trust, in BOSTON FINANCIAL’s own name or under the J.P. Morgan name (or that of the Trusts as a group or of an Affiliate thereof), one or more deposit accounts, into which BOSTON FINANCIAL shall deposit the funds BOSTON FINANCIAL receives for payment of dividends, distributions, redemptions or other disbursements provided for hereunder and to draw checks against such accounts.

E. BOSTON FINANCIAL is authorized and directed to stop payment of checks theretofore issued hereunder, but not presented for payment, when the payees thereof allege either that they have not received the checks or that such checks have been mislaid,

lost, stolen, destroyed or through no fault of theirs, are otherwise beyond their control, and cannot be produced by them for presentation and collection, and, to issue and deliver duplicate checks in replacement thereof.

21.	ASSUMPTION OF DUTIES BY THE TRUST OR AGENTS DESIGNATED BY THE TRUST.

A. The Trust or its designated agents other than BOSTON FINANCIAL may assume certain duties and responsibilities with respect to the operations of the Trust, including (with BOSTON FINANCIAL’s agreement) providing all, or a portion, of those services which BOSTON FINANCIAL is obligated to provide under Section 4.D of this Agreement.

B. To the extent the Trust or its agent or affiliate assumes BOSTON FINANCIAL’s duties and responsibilities (which assumption should be embodied in writing), BOSTON FINANCIAL shall be relieved from all responsibility and liability therefore (including any Adverse Consequences directly or indirectly arising out of or resulting from the actions or omissions of the Trust or its designees, as well as from any “as of” liability or withholding reversals in connection therewith) and BOSTON FINANCIAL is hereby indemnified and held harmless against any liability therefrom in the same manner and degree as provided for in Section 8 hereof.

C. Initially, with respect to accounts serviced by JPM or banks affiliated with or a correspondent of JPM, the Trust or its designees shall be responsible for the following: (i) answering and responding to telephone inquiries from shareholders and brokers; (ii) accepting shareholder and broker instructions (either or both oral and written) and (A) transmitting to BOSTON FINANCIAL orders (transactions and maintenance) based on such instructions for input into TA2000 by BOSTON FINANCIAL or (B) themselves inputting such orders into TA2000 on a remote basis; (iii) preparing and mailing confirmations; (iv) classifying the status of shareholders and shareholder accounts under applicable tax law and in accordance with the capabilities provided on TA2000, and performing all compliance functions with respect thereto, including without limitation obtaining certified TIN’s, Form W-8’s and other documentation, and properly coding accounts (social codes, tax status, foreign accounts and so forth) as provided for on TA2000; (v) on a remote basis establishing shareholder accounts on the TA2000^™ System, establishing the appropriate privileges thereupon and assigning social codes and Taxpayer Identification Number codes thereof; (vi) disbursing monies of the Trust; (vii) sending redemption and dividend wires in accordance with instructions received; and (viii) following up and collecting upon unsettled trade orders and unpaid broker-dealer, institutional or shareholder “as of’s.”

22.	TERMINATION OF AGREEMENT.

A. This Agreement shall be in effect from the 19th day of February, 2005, through the 31st day of August 2009 (the “Initial Term” of this Transfer Agency Agreement”).

This Agreement shall thereafter automatically extend for additional, successive one (1) year terms upon the expiration of any term hereof, unless terminated as of the end of any term by either party on not less than one hundred and twenty (120) days prior written notice to the other party. Each additional one (1) year period shall be an additional term of this Agreement. However, notwithstanding anything in this Agreement to the contrary, the effective date of any termination shall not occur during the period from December 15 through March 30 of any year to avoid adversely impacting year end, except if pursuant to Section 22.B of this Agreement. One hundred and twenty (120) days before the expiration of the Initial Term or a renewal term, the parties agree to negotiate in good faith and agree upon a fee schedule for the upcoming renewal term. Notwithstanding the termination or non-renewal of this Agreement, the terms and conditions of this Agreement shall continue to apply until the completion of the deconversion. The parties will mutually agree upon the timing and other details of the actual deconversion of the Trust’s business.

B. Each party, in addition to any other rights and remedies, shall have the right to terminate this Agreement forthwith upon the occurrence at any time of any of the following events with respect to the other party:

(1) The bankruptcy of the other party or its assigns or the appointment of a receiver for the other party or its assigns;

(2) failure by the other party or its assigns to perform its duties (including any material interruption or cessation of its operations) in accordance with the Agreement, which failure materially adversely affects the business operations of the first party and which failure continues for thirty (30) days after receipt of written notice from the first party, unless such failure is excused under Section 15 of this Agreement; or

(3) merger, consolidation or sale of substantially all of the assets of the other party or its assigns; provided, however, that this Section 22.B.3 shall not apply to any mergers, consolidations or sales of substantially all of the assets of the Trust constituting a “shell reorganization;” or

(4) acquisition of a controlling interest in the other party or its assigns by any third party except as may presently exist within the previous sixty (60) days.

In the event of a termination under this Section 22.B, the notice of termination for the reasons provided in this Section 22.B must be provided within sixty (60) days of a party’s learning of a reason permitting termination, and shall take effect within not less than ninety (90) and more than one hundred eighty (180) days from the date of receipt of the notice of termination. Any termination by reasons set forth in Section 22.B(1) and (2) shall not be subject to any termination fees or penalties relating to or arising out of termination, including without limitation any such fees or penalties relating to or arising out of termination set forth in “NOTES TO THE FEE SCHEDULE, “ Paragraph E on Exhibit A attached to this Agreement. In the event that (i) one or more Trusts terminate this Agreement as the result of an acquisition by or merger into another fund and the

remaining Trusts wish to continue the Agreement, or (ii) the Trusts terminate this Agreement as the result of their acquisition by or merger into another fund and such other fund’s shareholder records are, at the time of such acquisition or merger, maintained by BOSTON FINANCIAL or its affiliates, or (iii) one or more Trusts wish to move its transfer agency servicing operation from BOSTON FINANCIAL to an affiliated entity or another DST TA2000 platform (i.e., become a remote user of DST’s TA2000 system) as the result of such Trusts acquisition by or merger into another fund, then the parties agree to negotiate in good faith to determine whether or to what extent the termination fees under this Agreement shall apply to such termination.

C. BOSTON FINANCIAL may, on written notice to such Trust, immediately terminate this Agreement as to any Trust which itself or its Shares fail to be registered as provided in Section 3 of this Agreement at any time during this Agreement.

D. In the event of termination, the Trust will promptly pay BOSTON FINANCIAL all amounts due to BOSTON FINANCIAL hereunder, including any termination fee set forth in Exhibit A to this Agreement.

E. In the event of termination, BOSTON FINANCIAL will use its best efforts to transfer the records of the Trust to the designated successor transfer agent, to provide reasonable assistance to the Trust and its designated successor transfer agent, and to provide other information relating to its services provided hereunder (subject to the recompense of BOSTON FINANCIAL for such assistance at its standard rates and fees for personnel then in effect at that time); provided, however, as used herein “reasonable assistance” and “other information” shall not include assisting any new service or system provider to modify, alter, enhance, or improve its system or to improve, enhance, or alter its current system, or to provide any new functionality or to require BOSTON FINANCIAL to disclose any BOSTON FINANCIAL Confidential Information, as hereinafter defined, or any information which is otherwise confidential to BOSTON FINANCIAL.

23.	CONFIDENTIALITY AND INFORMATION SECURITY.

A. BOSTON FINANCIAL agrees on behalf of itself, its affiliates, its officers and employees, except as provided in Section 19.J. hereof, or as otherwise required by law, BOSTON FINANCIAL will keep confidential all records and data of and information in its possession relating to the Trust or its shareholders or shareholder accounts in any form disclosed to BOSTON FINANCIAL hereunder, including but not limited to any data and information in any form disclosed by the Trust, anyone acting on behalf of the Trust, or the Trust’s customers, prospective customers, or employees to BOSTON FINANCIAL, BOSTON FINANCIAL Personnel or any Subcontractor including Consumer Information (as “Consumer Information” is defined in SEC Regulation S-P) and non-public information which is learned by BOSTON FINANCIAL without the Trust’s intentional disclosure to it. Such information includes all Trust software, specifications, documentation, product proposals, financial information, data, source or object code, documentation, manuals, studies, internally devised technology, system or network

architecture or topology, security mechanisms, product or processing capacities, revenues, information relating to the business of the Trust (including internal procedures and policies, businesses plans, and products of the Trust), and all other trade secret, confidential or proprietary information and documentation of the Trust or its customers, prospective customers, employees, directors, outside directors, retirees and their respective spouses and families received in connection with this Agreement (whether or not it is designated as such). BOSTON FINANCIAL shall not disclose the same to any person except at the instruction (standing or specific), request or with the consent of the Trust. Notwithstanding the foregoing, BOSTON FINANCIAL shall be permitted in the ordinary course of business to provide such information to third parties providing services to BOSTON FINANCIAL which BOSTON FINANCIAL utilizes in connection with the services BOSTON FINANCIAL provides to the Trust under this Agreement or in accordance with Section 19.J. of this Agreement.

B. BOSTON FINANCIAL has provided the Trust with a summary of its information security standards, which are subject to change by BOSTON FINANCIAL from time to time to meet industry changes. BOSTON FINANCIAL agrees to comply with such information security standards in the performance of its services under this Agreement. BOSTON FINANCIAL acknowledges receipt of the Trust’s information security standards and, to the extent that BOSTON FINANCIAL does not comply with the Trust’s standards, BOSTON FINANCIAL shall inform the Trust of the standards it has adopted in lieu thereof.

C. The Trust on behalf of itself, its affiliates, its officers and employees and all entities which it directs BOSTON FINANCIAL to provide any of the following information agrees to keep confidential all financial statements and other financial records (other than statements and records relating solely to the Trust’s business dealings with BOSTON FINANCIAL) and all manuals, systems and other technical information and data, not publicly disclosed, relating to the operations and programs of BOSTON FINANCIAL and DST furnished to it by BOSTON FINANCIAL pursuant to this Agreement and will not disclose the same to any person except at the request or with the consent of BOSTON FINANCIAL.

D. (1) The Trust acknowledges that BOSTON FINANCIAL and/or its affiliates have proprietary rights in and to the TA2000^TM System used to perform services hereunder including, but not limited to the maintenance of shareholder accounts and records, processing of related information and generation of output, including, without limitation any changes or modifications of the TA2000^TM System and any other programs, data bases, supporting documentation, or procedures and all software, specifications, documentation, product proposals, financial information, data, source or object code, documentation, manuals, studies, internally devised technology, system or network architecture or topology, security mechanisms, product or processing capacities, revenues, information relating to the business of BOSTON FINANCIAL and/or its affiliates (including internal procedures and policies, businesses plans, and products of BOSTON FINANCIAL and/or its affiliates), and all other trade secret, confidential or proprietary information and documentation of BOSTON FINANCIAL and/or its

Affiliates or its customers, prospective customers, employees, directors, outside directors, retirees and their respective spouses and families (whether or not it is designated as such) and non-public information which is learned by the Trust without BOSTON FINANCIAL’s intentional disclosure to it (collectively “BOSTON FINANCIAL Confidential Information”) which the Trust’s access to the TA2000^TM System or computer hardware or software may permit the Trust or its agents or the Trust’s employees, directors, outside directors, retirees, their respective spouses and families to become aware of or to access and that the BOSTON FINANCIAL Confidential Information constitutes confidential material and trade secrets of BOSTON FINANCIAL and/or its affiliates. The Trust agrees to maintain the confidentiality of the BOSTON FINANCIAL Confidential Information of which it is, or becomes, aware or to which it has access.

(2) The Trust acknowledges that any unauthorized use, misuse, disclosure or taking of BOSTON FINANCIAL Confidential Information which is confidential as provided by law, or which is a trade secret, residing or existing internal or external to a computer, computer system, or computer network, or the knowing and unauthorized accessing or causing to be accessed of any computer, computer system, or computer network, may be subject to civil liabilities and criminal penalties under applicable state law. The Trust will advise all of its employees and agents who have access to any BOSTON FINANCIAL Confidential Information or to any computer equipment capable of accessing BOSTON FINANCIAL hardware or software of the foregoing.

(3) The Trust acknowledges that disclosure of the BOSTON FINANCIAL Confidential Information may give rise to an irreparable injury to BOSTON FINANCIAL and/or its affiliates inadequately compensable in damages. Accordingly, BOSTON FINANCIAL may seek (without the posting of any bond or other security) injunctive relief against the breach of the foregoing undertaking of confidentiality and nondisclosure, in addition to any other legal remedies which may be available, and the Trust consents to the obtaining of such injunctive relief. All of the undertakings and obligations relating to confidentiality and nondisclosure, whether contained in this Section or elsewhere in this Agreement shall survive the termination or expiration of this Agreement for a period of ten (10) years.

24.	CHANGES AND MODIFICATIONS.

A. During the term of this Agreement BOSTON FINANCIAL will use on behalf of the Trust without additional cost all modifications, enhancements, or changes which BOSTON FINANCIAL or its affiliates may make to the TA2000^TM System in the normal course of its business and which are applicable to functions and features offered by the Trust to its shareholders, unless those BOSTON FINANCIAL clients having substantially similar service and billing arrangements to the Trust are charged separately for such modifications, enhancements or changes, including, without limitation, substantial system revisions or modifications necessitated by changes in existing laws, rules or regulations. The Trust agrees to pay BOSTON FINANCIAL promptly for modifications and improvements that are charged for separately at the rate provided for in BOSTON FINANCIAL’s standard pricing schedule, which shall be identical for those

BOSTON FINANCIAL clients which have substantially similar service and billing arrangements to the Trust, if a standard pricing schedule shall exist. If there is no standard pricing schedule, the parties shall mutually agree upon the rates to be charged.

B. BOSTON FINANCIAL and/ or its affiliates shall have the right, at any time and from time to time, to alter and modify any systems, programs, procedures or facilities used or employed in performing its duties and obligations hereunder; provided that the Trust will be notified as promptly as possible prior to implementation of such alterations and modifications and that no such alteration or modification or deletion shall materially adversely change or affect the operations and procedures of the Trust in using or employing the TA2000^TM System or BOSTON FINANCIAL Facilities hereunder or the reports to be generated by such system and facilities hereunder, unless the Trust is given thirty (30) days prior notice to allow the Trust to change its procedures and BOSTON FINANCIAL provides the Trust with revised operating procedures and controls.

C. All enhancements, improvements, changes, modifications or new features added to the TA2000^TM System however developed or paid for shall be, and shall remain, the confidential and exclusive property of, and proprietary to, BOSTON FINANCIAL and/or its affiliates.

25.	ASSIGNMENT AND SUBCONTRACTORS.

A. Neither this Agreement nor any rights or obligations hereunder may be assigned by either party hereto without the written consent of the other party. In the event of a mutually agreed to assignment, each party shall remain liable for the performance of its assignee(s). BOSTON FINANCIAL may, however, employ agents to assist it in performing its duties hereunder; provided, however, that BOSTON FINANCIAL shall be fully responsible to the Trust for the acts and omissions of any agent employed by it to the same extent as it is for its own acts and omissions and BOSTON FINANCIAL shall obtain the Trust’s prior approval for the employment of any such agent that is not an affiliate of BOSTON FINANCIAL.

B. Notwithstanding anything in this Agreement to the contrary, nothing herein shall impose any duty upon BOSTON FINANCIAL in connection with or make BOSTON FINANCIAL liable for the actions or omissions to act of unaffiliated third parties such as, by way of example and not limitation, Airborne Services, the U.S. mails, the National Securities Clearing Commission and telecommunication companies, provided, if BOSTON FINANCIAL selected such company, BOSTON FINANCIAL shall have exercised due care in selecting the same.

26.	LIMITATIONS ON LIABILITY.

A. Notwithstanding anything in this Agreement to the contrary, each Trust that executed this Agreement is and shall be regarded for all purposes hereunder as a separate party apart from each other Trust and any Fund of any such other Trust. To the extent that a Trust is comprised of more than one Fund, each Fund shall be regarded for all purposes hereunder as a separate party apart from each other Fund. Unless the context otherwise requires, with respect to every transaction covered by this Agreement, every reference herein to the Trust shall be deemed to relate solely to the particular Fund or Trust to which such transaction relates. Under no circumstances shall the rights, obligations or remedies with respect to a particular Trust or a particular Fund constitute a right, obligation or remedy applicable to any other Trust or Fund. The use of this single document to memorialize the separate agreement of each Trust and each Fund herein is understood to be for clerical convenience only and shall not constitute any basis for joining the Trusts or Funds for any reason.

B Notice is hereby given that a copy of each Trust’s Declaration of Trust or Certificate of Trust and all amendments thereto is on file with the Secretary of State of the state of its organization; that this Agreement has been executed on behalf of the Trust by the undersigned duly authorized representative of the Trust in his/her capacity as such and not individually; and that the obligations of this Agreement shall only be binding upon the assets and property of the Trust and shall not be binding upon any trustee, officer or shareholder of the Trust individually.

27.	MISCELLANEOUS.

A. This Agreement shall be construed according to, and the rights and liabilities of the parties hereto shall be governed by, the laws of the Commonwealth of Massachusetts, excluding that body of law applicable to choice of law.

B. All terms and provisions of this Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns.

C. The representations and warranties, and the indemnification extended hereunder, if any, are intended to and shall continue after and survive the execution, expiration, termination or cancellation of this Agreement or the performance of services hereunder until any statute of limitations applicable to the matter at issues shall have expired.

D. No provisions of this Agreement may be amended or modified in any manner except by a written agreement properly authorized and executed by each party hereto.

E. The captions in this Agreement are included for convenience of reference only, and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect.

F. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

G. If any part, term or provision of this Agreement is by the courts held to be illegal, in conflict with any law or otherwise invalid, the remaining portion or portions shall be considered severable and not be affected, and the rights and obligations of the parties shall be construed and enforced as if the Agreement did not contain the particular part, term or provision held to be illegal or invalid.

H. Neither the execution nor performance of this Agreement shall be deemed to create a partnership or joint venture by and between the Trust and BOSTON FINANCIAL. It is understood and agreed that all services performed hereunder by BOSTON FINANCIAL shall be as an independent contractor and not as an employee of the Trust. This Agreement is between BOSTON FINANCIAL and the Trust and neither this Agreement nor the performance of services under it shall create any rights in any third parties. There are no third party beneficiaries hereto.

I. Except as specifically provided herein, this Agreement does not in any way affect any other agreements entered into among the parties hereto and any actions taken or omitted by any party hereunder shall not affect any rights or obligations of any other party hereunder.

J. The failure of either party to insist upon the performance of any terms or conditions of this Agreement or to enforce any rights resulting from any breach of any of the terms or conditions of this Agreement, including the payment of damages, shall not be construed as a continuing or permanent waiver of any such terms, conditions, rights or privileges, but the same shall continue and remain in full force and effect as if no such forbearance or waiver had occurred.

K. (a) During the term of this Agreement, the Trust hereby grants to BOSTON FINANCIAL a nonexclusive, worldwide and royalty-free right and license to store, reproduce, display, perform, transmit and use the Trust intellectual property and the Trust software in connection with the Services, solely for the purposes necessary for BOSTON FINANCIAL to fulfill its obligations pursuant to this Agreement (and not for the benefit of any third party). BOSTON FINANCIAL acknowledges and agrees that its use of the Trust intellectual property solely for the purposes necessary for BOSTON FINANCIAL to fulfill its obligations pursuant to this Agreement shall not create any right, title or interest in or to such the Trust intellectual property. Except for the licenses expressly granted hereunder by the Trust to BOSTON FINANCIAL, neither this Agreement nor any disclosure made hereunder grants any license by the Trust to BOSTON FINANCIAL of any Trust intellectual property.

(b) Except as may be otherwise expressly provided in this Agreement, the Trust does not grant to BOSTON FINANCIAL any right or license, express or implied, in or to the Trust intellectual property, the Trust software or the Trust’s operating environment. BOSTON FINANCIAL agrees that the Trust and/or the Trust’s licensors’, as the case may be, are the exclusive owners of, and hold and shall retain, all right, title and interest in and to the Trust intellectual property, the Trust software, and the trust’s operating environment, and BOSTON FINANCIAL shall have no ownership or use rights therein except as set forth herein.

L. Without the consent of the Trust, BOSTON FINANCIAL shall not use the Trust’s trade name, trademark, service mark or logo in BOSTON FINANCIAL’s public sales, marketing, or publicity activities including, but not limited to, press releases, interviews with representatives of any written publication, television station or network, or radio station or network.

M. This Agreement constitutes the entire agreement between the parties hereto and supersedes any prior agreement, draft or agreement or proposal with respect to the subject matter hereof, whether oral or written, and this Agreement may not be modified except by written instrument executed by both parties.

N. All notices to be given hereunder shall be deemed properly given if delivered in person or if sent by U.S. mail, first class, postage prepaid, or if sent by facsimile and thereafter confirmed by mail as follows: If to BOSTON FINANCIAL:

BOSTON FINANCIAL DATA SERVICES, INC.

The Poindexter Building

333 W. 9^th Street

Kansas City, Missouri 64105

Attention: Mark Scovell

Facsimile: (816) 843-8652

With a copy of non-operational notices to:

BOSTON FINANCIAL DATA SERVICES, INC.

2 Heritage Drive – 4^th Floor

North Quincy, MA 02171

Attn: Legal Department

Facsimile No.: 617 483-2490

If to the Trust:

JPMORGAN (Each of the entities listed on Appendix A hereto)

522 Fifth Avenue

New York, New York 10036

Attention: Fund Secretary

Facsimile No.: 212 837-5153

With a copy to:

JPMORGAN FUNDS

1111 Polaris Parkway, Floor 2G

Columbus, Ohio 43240

Attention: Head of Shareholder Services

Facsimile No.: 614-213-3486

or to such other address as shall have been specified in writing by the party to whom such notice is to be given.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective duly authorized officers, to be effective as of the day and year first above written.


TRUST (Each of the entities listed on Appendix A hereto)

BY:		/s/ Robert L. Young

Title:		Senior Vice President
as an Authorized Officer on behalf of each
of the Funds indicated on Appendix A


BOSTON FINANCIAL DATA SERVICES, INC.

By:		/s/ Tina M. Hammele

Title:		Division Vice President

Appendix A

Transfer Agency Agreement for

JPMorgan Funds

JPMorgan Trust I

JPMorgan Emerging Markets Debt Fund

JPMorgan Bond Fund

JPMorgan Global Strategic Income Fund

JPMorgan Short Term Bond Fund

JPMorgan Enhanced Income Fund

JPMorgan California Tax Free Bond Fund

JPMorgan Intermediate Tax Free Bond Fund

JPMorgan New Jersey Tax Free Bond Fund

JPMorgan New York Tax Free Bond Fund

JPMorgan Tax Aware Short-Intermediate Income Fund

JPMorgan Tax Aware Disciplined Equity Fund

JPMorgan Tax Aware Enhanced Income Fund

JPMorgan Tax Aware U.S. Equity Fund

JPMorgan Tax Aware Large Cap Growth Fund

JPMorgan Tax Aware Large Cap Value Fund

JPMorgan Tax Aware International Opportunities Fund

JPMorgan Global Healthcare Fund

JPMorgan Market Neutral Fund

JPMorgan Emerging Markets Equity Fund

JPMorgan International Opportunities Fund

JPMorgan International Value Fund

JPMorgan Asia Equity Fund

JPMorgan Intrepid European Fund

JPMorgan International Growth Fund

JPMorgan International Small Cap Equity Fund

JPMorgan Japan Fund

JPMorgan International Equity Fund

JPMorgan Disciplined Equity Fund

JPMorgan Diversified Fund

JPMorgan U.S. Equity Fund

JPMorgan U.S. Small Company Fund

JPMorgan Capital Growth Fund

JPMorgan Dynamic Small Cap Fund

JPMorgan Growth and Income Fund

JPMorgan Mid Cap Equity Fund

JPMorgan Small Cap Core Fund

JPMorgan Small Cap Equity Fund

JPMorgan Value Advantage Fund

JPMorgan Intrepid America Fund

JPMorgan Intrepid Growth Fund

JPMorgan Intrepid Contrarian Fund

JPMorgan Intrepid Value Fund

JPMorgan 100% U.S. Treasury Securities Money Market Fund

JPMorgan California Municipal Money Market Fund

JPMorgan Federal Money Market Fund

JPMorgan New York Municipal Money Market Fund

JPMorgan Prime Money Market Fund

JPMorgan Tax Free Money Market Fund

Undiscovered Managers Funds

Undiscovered Managers Behavioral Growth Fund

Undiscovered Managers Behavioral Value Fund

Undiscovered Managers REIT Fund

Undiscovered Managers Small Cap Growth Fund

J.P. Morgan Mutual Fund Group

JPMorgan Short Term Bond Fund II

J.P. Morgan Fleming Mutual Fund Group, Inc.

JPMorgan Mid Cap Value Fund

J.P. Morgan Mutual Fund Investment Trust

JPMorgan Mid Cap Growth Fund

UM Investment Trust

UM Multi-Strategy Fund

UM Investment Trust II

Undiscovered Managers Spinnaker Fund

J.P. Morgan Series Trust II

JPMorgan Bond Portfolio

JPMorgan International Equity Portfolio

JPMorgan Mid Cap Value Portfolio

JPMorgan Small Company Portfolio

JPMorgan U.S. Large Cap Core Equity Portfolio

J.P. Morgan Fleming Series Trust

JPMorgan Multi-Manager Small Cap Growth Fund

JPMorgan Multi-Manager Small Cap Value Fund

JPMorgan Institutional Trust

JPMorgan Ultra Short-Term Bond Trust

JPMorgan Short-Term Bond Trust

JPMorgan Intermediate Bond Trust

JPMorgan Core Bond Trust

JPMorgan Equity Index Trust

JPMorgan Trust II

JPMorgan Small Cap Growth Fund

JPMorgan Small Cap Value Fund

JPMorgan Strategic Small Cap Value Fund

JPMorgan Diversified Mid Cap Growth Fund

JPMorgan Diversified Mid Cap Value Fund

JPMorgan Diversified Mid Cap Fund

JPMorgan Large Cap Growth Fund

JPMorgan Large Cap Value Fund

JPMorgan Equity Income Fund

JPMorgan Equity Index Fund

JPMorgan Market Expansion Index Fund

JPMorgan International Equity Index Fund

JPMorgan Technology Fund

JPMorgan Multi-Cap Market Neutral Fund

JPMorgan U.S. Real Estate Fund

JPMorgan Investor Growth Fund

JPMorgan Investor Growth & Income Fund

JPMorgan Investor Balanced Fund

JPMorgan Investor Conservative Growth Fund

JPMorgan Short Duration Bond Fund

JPMorgan Ultra Short Term Bond Fund

JPMorgan Intermediate Bond Fund

JPMorgan Core Bond Fund

JPMorgan Core Plus Bond Fund

JPMorgan Government Bond Fund

JPMorgan Treasury & Agency Fund

JPMorgan High Yield Bond Fund

JPMorgan Mortgage-Backed Securities Fund

JPMorgan Short Term Municipal Bond Fund

JPMorgan Tax Free Bond Fund

JPMorgan Municipal Income Fund

JPMorgan Arizona Municipal Bond Fund

JPMorgan Kentucky Municipal Bond Fund

JPMorgan Louisiana Municipal Bond Fund

JPMorgan Michigan Municipal Bond Fund

JPMorgan Ohio Municipal Bond Fund

JPMorgan West Virginia Municipal Bond Fund

JPMorgan Liquid Assets Money Market Fund

JPMorgan U.S. Government Money Market Fund

JPMorgan U.S. Treasury Plus Money Market Fund

JPMorgan Municipal Money Market Fund

JPMorgan Michigan Municipal Money Market Fund

JPMorgan Ohio Municipal Money Market Fund

One Group Investment Trust (to be renamed JPMorgan Investment Trust on or about May 1, 2005)

One Group Investment Trust Bond Portfolio (to be renamed JPMorgan Investment Trust Bond Portfolio)

One Group Investment Trust Government Bond Portfolio (to be renamed JPMorgan Investment Trust Government Bond Portfolio)

One Group Investment Trust Balanced Portfolio (to be renamed JPMorgan Investment Trust Balanced Portfolio)

One Group Investment Trust Large Cap Growth Portfolio (to be renamed JPMorgan Investment Trust Large Cap Growth Portfolio)

One Group Investment Trust Equity Index Portfolio (to be renamed JPMorgan Investment Trust Equity Index Portfolio)

One Group Investment Trust Diversified Equity Portfolio (to be renamed JPMorgan Investment Trust Diversified Equity Portfolio)

One Group Investment Trust Mid Cap Growth Portfolio (to be renamed JPMorgan Investment Trust Mid Cap Growth Portfolio)

One Group Investment Trust Diversified Mid Cap Portfolio (to be renamed JPMorgan Investment Trust Diversified Mid Cap Portfolio)

One Group Investment Trust Mid Cap Value Portfolio (to be renamed JPMorgan Investment Trust Mid Cap Value Portfolio)

Appendix A

Transfer Agency Agreement for

JPMorgan Funds

(Amended as of August 11, 2005)

JPMorgan Trust I

JPMorgan Emerging Markets Debt Fund

JPMorgan Bond Fund

JPMorgan Global Strategic Income Fund

JPMorgan Short Term Bond Fund

JPMorgan Enhanced Income Fund

JPMorgan California Tax Free Bond Fund

JPMorgan Intermediate Tax Free Bond Fund

JPMorgan New Jersey Tax Free Bond Fund

JPMorgan New York Tax Free Bond Fund

JPMorgan Tax Aware Short-Intermediate Income Fund

JPMorgan Tax Aware Disciplined Equity Fund

JPMorgan Tax Aware Enhanced Income Fund

JPMorgan Tax Aware U.S. Equity Fund

JPMorgan Tax Aware Large Cap Growth Fund

JPMorgan Tax Aware Large Cap Value Fund

JPMorgan Tax Aware International Opportunities Fund

JPMorgan Global Healthcare Fund

JPMorgan Market Neutral Fund

JPMorgan Emerging Markets Equity Fund

JPMorgan International Opportunities Fund

JPMorgan International Value Fund

JPMorgan Asia Equity Fund

JPMorgan Intrepid European Fund

JPMorgan International Growth Fund

JPMorgan International Small Cap Equity Fund

JPMorgan Japan Fund

JPMorgan International Equity Fund

JPMorgan Disciplined Equity Fund

JPMorgan Diversified Fund

JPMorgan U.S. Equity Fund

JPMorgan U.S. Small Company Fund

JPMorgan Capital Growth Fund

JPMorgan Dynamic Small Cap Fund

JPMorgan Growth and Income Fund

JPMorgan Mid Cap Equity Fund

JPMorgan Small Cap Core Fund

JPMorgan Small Cap Equity Fund

JPMorgan Value Advantage Fund

JPMorgan Intrepid America Fund

JPMorgan Intrepid Growth Fund

A - 1

JPMorgan Intrepid Contrarian Fund

JPMorgan Intrepid Value Fund

JPMorgan 100% U.S. Treasury Securities Money Market Fund

JPMorgan California Municipal Money Market Fund

JPMorgan Federal Money Market Fund

JPMorgan New York Municipal Money Market Fund

JPMorgan Prime Money Market Fund

JPMorgan Tax Free Money Market Fund

JPMorgan Tax Aware Core Equity Fund

JPMorgan Tax Aware Diversified Equity Fund

JPMorgan Tax Aware International Fund

JPMorgan Tax Aware Real Return Fund

JPMorgan Real Return Fund

JPMorgan U.S. Large Cap Core Plus Fund (effective 9/30/05)

JPMorgan Micro Cap Fund (effective 10/31/05)

Highbridge Statistical Market Neutral Fund (effective with the effectiveness of the Fund’s SEC registration)

Undiscovered Managers Funds

Undiscovered Managers Behavioral Growth Fund

Undiscovered Managers Behavioral Value Fund

Undiscovered Managers REIT Fund

Undiscovered Managers Small Cap Growth Fund

J.P. Morgan Mutual Fund Group

JPMorgan Short Term Bond Fund II

J.P. Morgan Fleming Mutual Fund Group, Inc.

JPMorgan Mid Cap Value Fund

J.P. Morgan Mutual Fund Investment Trust

JPMorgan Growth Advantage Fund (JPMorgan Mid Cap Growth Fund until 8/17/05)

UM Investment Trust

Undiscovered Managers Multi-Strategy Fund (UM Multi-Strategy Fund until 8/22/05)

UM Investment Trust II

Undiscovered Managers Spinnaker Fund

A - 2

J.P. Morgan Series Trust II

JPMorgan Bond Portfolio

JPMorgan International Equity Portfolio

JPMorgan Mid Cap Value Portfolio

JPMorgan Small Company Portfolio

JPMorgan U.S. Large Cap Core Equity Portfolio

J.P. Morgan Fleming Series Trust

JPMorgan Multi-Manager Small Cap Growth Fund

JPMorgan Multi-Manager Small Cap Value Fund

JPMorgan Institutional Trust

JPMorgan Ultra Short-Term Bond Trust

JPMorgan Short-Term Bond Trust

JPMorgan Intermediate Bond Trust

JPMorgan Core Bond Trust

JPMorgan Equity Index Trust

JPMorgan Trust II

JPMorgan Small Cap Growth Fund

JPMorgan Small Cap Value Fund

JPMorgan Strategic Small Cap Value Fund

JPMorgan Diversified Mid Cap Growth Fund

JPMorgan Diversified Mid Cap Value Fund

JPMorgan Intrepid Mid Cap Fund (formerly JPMorgan Diversified Mid Cap Fund until 7/29/05)

JPMorgan Large Cap Growth Fund

JPMorgan Large Cap Value Fund

JPMorgan Equity Income Fund

JPMorgan Equity Index Fund

JPMorgan Market Expansion Index Fund

JPMorgan International Equity Index Fund

JPMorgan Technology Fund

JPMorgan Multi-Cap Market Neutral Fund

JPMorgan U.S. Real Estate Fund

JPMorgan Investor Growth Fund

JPMorgan Investor Growth & Income Fund

JPMorgan Investor Balanced Fund

JPMorgan Investor Conservative Growth Fund

JPMorgan Short Duration Bond Fund

JPMorgan Ultra Short Term Bond Fund

JPMorgan Intermediate Bond Fund

JPMorgan Core Bond Fund

JPMorgan Core Plus Bond Fund

JPMorgan Government Bond Fund

JPMorgan Treasury & Agency Fund

JPMorgan High Yield Bond Fund

A - 3

JPMorgan Mortgage-Backed Securities Fund

JPMorgan Short Term Municipal Bond Fund

JPMorgan Tax Free Bond Fund

JPMorgan Municipal Income Fund

JPMorgan Arizona Municipal Bond Fund

JPMorgan Kentucky Municipal Bond Fund

JPMorgan Louisiana Municipal Bond Fund

JPMorgan Michigan Municipal Bond Fund

JPMorgan Ohio Municipal Bond Fund

JPMorgan West Virginia Municipal Bond Fund

JPMorgan Liquid Assets Money Market Fund

JPMorgan U.S. Government Money Market Fund

JPMorgan U.S. Treasury Plus Money Market Fund

JPMorgan Municipal Money Market Fund

JPMorgan Michigan Municipal Money Market Fund

JPMorgan Ohio Municipal Money Market Fund

JPMorgan Investment Trust

JPMorgan Investment Trust Bond Portfolio

JPMorgan Investment Trust Government Bond Portfolio

JPMorgan Investment Trust Balanced Portfolio

JPMorgan Investment Trust Large Cap Growth Portfolio

JPMorgan Investment Trust Equity Index Portfolio

JPMorgan Investment Trust Diversified Equity Portfolio

JPMorgan Investment Trust Mid Cap Growth Portfolio

JPMorgan Investment Trust Diversified Mid Cap Portfolio

JPMorgan Investment Trust Mid Cap Value Portfolio

A - 4


JPMorgan Trust I
JPMorgan Trust II
Undiscovered Managers Funds
J.P. Morgan Mutual Fund Group
J.P. Morgan Fleming Mutual Fund Group, Inc.
J.P. Morgan Mutual Fund Investment Trust
UM Investment Trust
UM Investment Trust II
J.P. Morgan Series Trust II
J.P. Morgan Fleming Series Trust
JPMorgan Institutional Trust
JPMorgan Investment Trust
By an Authorized Officer on behalf of each of
the Funds indicated on this Appendix A

By:		/s/ Robert L. Young

Name:		Robert L. Young

Title:		Senior Vice President

Boston Financial Data Services, Inc.

By:		/s/ Mark Scovell

Name:		Mark Scovell

Title:		Senior Vice President

A - 5

EX-99.H.2 5 dex99h2.htm FORM OF ADMINISTRATION AGREEMENT Form of Administration Agreement

Exhibit (h)(2)

ADMINISTRATION AGREEMENT

AGREEMENT dated as of the 4th day of February, 2005 by and between JPMorgan Institutional Trust, a Delaware statutory trust (“Trust”), having its principal place of business at 522 Fifth Avenue, New York, New York 10036, and One Group Administrative Services, Inc. (to be renamed JPMorgan Funds Management, Inc. effective February 19, 2005) (“Administrator”), a Delaware corporation having its principal place of business at 1111 Polaris Parkway, Columbus, Ohio 43240. This Agreement shall be effective February 4, 2005.

WHEREAS, the Trust is an open-end, management investment company registered with the Securities and Exchange Commission (“Commission”) under the Investment Company Act of 1940, as amended (“1940 Act”); and

WHEREAS, the Trust desires to retain the Administrator to furnish administrative services to each series of the Trust, all as now or hereafter may be identified on Schedule A hereto as such Schedule may be amended from time to time (“Funds”); and

WHEREAS, the Administrator is willing to furnish such administrative services upon the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the mutual promises and covenants herein set forth, the parties agree as follows:

ARTICLE 1. Retention of the Administrator. The Trust hereby retains the Administrator to act as the administrator of the Funds and to furnish the Funds with the administrative services as set forth in Article 2 below. The Administrator hereby accepts such employment to perform the duties set forth below. The Administrator shall, for all purposes herein, be deemed to be an independent contractor and, unless otherwise expressly provided or authorized, shall have no authority to act for or represent the Trust in any way and shall not be deemed an agent of the Trust.

ARTICLE 2. Administrative Services. Subject to the direction and control of the Board of Trustees of the Trust (“Trustees”), the Administrator shall perform or supervise the performance by others of administrative services in connection with the operations of the Funds.

Without limiting the generality of the foregoing, the Administrator shall:

Provide all necessary office facilities (which may be in the offices of the Administrator or an affiliate), equipment, and personnel for handling the affairs of the Funds;

Subject to supervision by counsel to the Trust, prepare amendments to, file, and maintain the Trust’s governing documents, including the Declaration of Trust, the Bylaws, and minutes of meetings of shareholders;

Provide individuals reasonably acceptable to the Trust’s Trustees to serve as officers of the Trust, who will be responsible for the management of certain of the Trust’s affairs as determined by the Trust’s Trustees;

Prepare agenda and prepare and compile board materials for all Trustee meetings and review, file, and maintain minutes of meetings of Trustees;

Provide appropriate personnel for Board of Trustees meetings;

Subject to supervision by counsel to the Trust, prepare, review and file the Trust’s Registration Statement (on Form N-1A or any replacements therefor), periodic supplements and amendments to the Registration Statement, proxy materials and other filings with the Commission;

Subject to supervision by counsel to the Trust, prepare and file, or supervise the preparation and filing of, Form N-CSR and Form N-Q and provide any sub-certifications which may reasonably be requested by the Trust’s Principal Executive Officer or Principal Financial Officer in connection with the required certification of those filings and coordinate receipt of similar sub-certifications from other service providers that provide information to be included in such filings;

Prepare and file, or supervise the preparation and filing of, all necessary Blue Sky filings;

Prepare and file, or supervise the preparation and filing of, annual Form N-PX;

Arrange for and coordinate the layout and printing of offering memoranda, statements of additional information, semi-annual and annual reports to shareholders, and proxy materials;

Prepare, with the assistance of the Fund’s investment adviser, and sub-adviser, as applicable, communications to shareholders;

Coordinate the mailing of offering memoranda, notices, proxy statements, proxies, semi-annual and annual reports to shareholders, and other reports to Trust shareholders, and supervise and facilitate the proxy solicitation process for all shareholder meetings, including the tabulation of shareholder votes;

Prepare for and conduct shareholder meetings, if necessary;

Assist with the design, development, and operation of Funds for the Trust, including new classes, investment objectives, policies and structure, if necessary;

Prepare semi-annual and annual financial statements;

Prepare and file periodic reports to shareholders and the Commission on Form N-SAR or any replacement forms therefor;

Prepare and file Notices to the Commission required pursuant to Rule 24f-2 under the 1940 Act for any Fund which offers common shares of beneficial interest registered under the Securities Act of 1933, as amended;

Compile data for, assist the Trust or its designee in the preparation of, and file, all of the Funds’ federal and state tax returns and required tax filings other than those required to be made by the Trust’s custodian and transfer agent;

Prepare and distribute year-end shareholder tax information letters and Forms 1099-MISC for trustee fees and vendor payments;

Identify and track book-tax differences;

Prepare quarterly tax compliance checklist for use by Fund managers;

Calculate declaration of income/capital gain distributions in compliance with income/excise tax distribution requirements and ensure that such distributions are not “preferential” under the Internal Revenue Code;

Review reports produced by, and the operations and performance of, the various organizations providing services to the Trust or any Fund of the Trust, including, without limitation, the Trust’s investment adviser, custodian, sub-adviser, fund accountant, shareholder servicing agent, transfer agent, outside legal counsel, independent public accountants, and other entities providing services to the Trust, and at the request of the Trustees, report to the Trustees on the performance of such organizations;

Prepare, negotiate, and administer contracts on behalf of the Trust with, among others, the Trust’s investment adviser, custodian, fund accountant, shareholder servicing agent, and transfer agent and oversee expense disbursement and any service provider conversions;

Calculate contractual Trust expenses and control all disbursements for the Trust, and as appropriate compute the Trust’s yields, total return, expense. ratios, portfolio turnover rate and, if required, portfolio average dollar weighted maturity;

Prepare annual Trust expense budget and monthly accrual analyses, perform various expense savings analysis and expense benchmarking analysis;

aa.

Prepare expense authorizations and review or prepare for management review all invoices for Trust expenses;

bb.

Calculate performance data of the Funds for dissemination to information service providers covering the investment company industry;

cc.

Review marketing material to verify that Fund information is accurate;

dd.

Prepare and file proofs of claims in connection with Class Action notices;

ee.

Monitor the Trust’s compliance with the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder, so as to enable the Trust to maintain its status as a “regulated investment company;”

ff.

Monitor the Trust’s compliance with all applicable federal securities and other regulatory requirements;

gg.

Monitor the Trust’s compliance with its registration statement;

hh.

Obtain and keep in effect fidelity bonds and directors and officers/errors and omissions insurance policies for the Trust in accordance with the requirements of Rules 17g-1 and 17d-1(d)(7) under the 1940 Act as such bonds and policies are approved by the Trust’s Trustees;

ii.

Provide information and assistance with inspections by the Commission;

jj.

Coordinate annual audit activities, including providing information and assistance with respect to audits conducted by the Trust’s independent auditors;

kk.

Compile and summarize periodic Rule 2a-7 money market funds’ analysis for Board of Trustees review, if applicable;

ll.

Assist management with the administration of the trustees’ deferred compensation plans, if any;

mm.

Design, implement and maintain a disaster recovery program for the Trust’s records;

nn.

Assist the Trust’s Chief Compliance Officer with issues regarding the Trust’s compliance program (as approved by the Board of Trustees of the Trust in accordance with Rule 38a-1 under the 1940 Act) as reasonably requested;

oo.

Administer the implementation and required distribution of the Privacy Policy of the Trust to the extent required under Regulation S-P; and

pp.

Perform all administrative services and functions of the Trust and each Fund to the extent administrative services and functions are not provided to the Trust or such Fund pursuant to the Trust’s or such Fund’s investment advisory agreement, custodian agreement, fund accounting agreement, shareholder servicing agreement, and transfer agent agreement.

The Administrator shall perform such other administrative services for the Trust that are mutually agreed upon by the parties from time to time.

ARTICLE 3. Additional Services; Delegation. The Administrator may provide additional reports and services upon the request of the Trust or a Fund’s investment adviser, which may result in an additional charge, the amount of which shall be agreed upon between the parties. The Administrator may delegate some or all of its responsibilities under this Agreement, as provided in Article 9.

ARTICLE 4. Allocation of Charges and Expenses.

(A) The Administrator. The Administrator shall furnish at its own expense the executive, supervisory and clerical personnel necessary to perform its obligations under this Agreement. The Administrator shall also provide the items which it is obligated to provide under this Agreement, and shall pay all compensation, if any, of officers of the Trust as well as all Trustees of the Trust who are officers or employees of the Administrator or any affiliated company of the Administrator; provided, however, that unless otherwise specifically provided, the Administrator shall not be obligated to pay the compensation of any employee of the Trust retained by the Trustees of the Trust to perform services on behalf of the Trust and provided further that the parties may in the future mutually agree that the Trust may pay all or a portion of the compensation of the Trust’s Chief Compliance Officer.

(B) The Trust. The Trust assumes and shall pay or cause to be paid all other expenses of the Trust not otherwise allocated herein, including, without limitation, organization costs, taxes, fees and expenses for legal and auditing services, fees and expenses of pricing services, transfer agency fees and expenses, the expenses of preparing (including typesetting), printing and mailing reports, prospectuses, offering memoranda, statements of additional information, offering memorandum supplements, proxy solicitation material and notices to existing shareholders, all expenses incurred in connection with issuing and redeeming shares, the cost of custodial services, the cost of initial and ongoing registration of the shares under Federal and state securities laws, fees and out-of-pocket expenses of Trustees who are not

officers or employees of the Administrator, the Distributor, or the Investment Adviser to the Trust or any affiliated company of the Administrator, the Distributor, or the Investment Adviser, insurance, interest, brokerage costs, litigation and other extraordinary or nonrecurring expenses, and all fees and charges of investment advisers to the Trust.

ARTICLE 5. Compensation of the Administrator.

(A) Administration Fee. In consideration of the services rendered, the facilities furnished and the expenses assumed by the Administrator pursuant to this Agreement, the Trust shall pay the Administrator compensation at an annual rate specified in Schedule B attached hereto. Such compensation shall be calculated and accrued daily, and paid to the Administrator on the first business day of each month, or at such time(s) as the Administrator shall request and the parties hereto shall agree. The Trust shall also reimburse the Administrator for its reasonable out-of-pocket expenses, including the travel and lodging expenses incurred by officers and employees of the Administrator in connection with attendance at Trustee meetings. If this Agreement terminates before the last day of a month, the Administrator’s compensation for that part of the month in which this Agreement is in effect shall be prorated according to the proportion which such period bears to the full monthly period and shall be payable upon the date of termination of this Agreement.

For the purpose of determining fees payable to the Administrator, the value of net assets of a particular Fund shall be computed in the manner described in the Trust’s registration statement for the computation of the Trust’s net assets in connection with the determination of the net asset value of the Trust’s shares.

(B) Survival of Compensation Rights. All rights of compensation under this Agreement for services performed as of the termination date shall survive the termination of this Agreement.

ARTICLE 6. Limitation of Liability of the Administrator. The duties of the Administrator shall be confined to those expressly set forth herein, and no implied duties are assumed by or may be asserted against the Administrator hereunder. The Administrator shall not be liable for any error of judgment or mistake of law or for any loss arising out of any act or omission in carrying out its duties hereunder, except a loss resulting from willful misfeasance, bad faith or negligence in the performance of its duties, or by reason of reckless disregard of its obligations and duties hereunder, except as may otherwise be provided under provisions of applicable law which cannot be waived or modified hereby. Any person, even though also an employee, or agent of the Administrator, who may be or become an officer, Trustee, employee or agent of the Trust or the Funds shall be deemed, when rendering services to the Trust or the Funds, or acting on any business of that party, to be rendering such services to or acting solely for that party and not as a partner, employee, or agent or one under the control or direction of the Administrator even though paid by it.

So long as the Administrator acts in good faith and with due diligence and without negligence, the Trust assumes full responsibility and shall indemnify the Administrator, its employees, agents, directors, officers and nominees and hold them harmless from and against any and all actions, suits and claims, whether groundless or otherwise, and from and against any and all losses, damages, costs, charges, reasonable counsel fees and disbursements, payments, expenses and liabilities (including reasonable investigation expenses) arising directly or indirectly out of the Administrator’s actions taken or non-actions with respect to the performance of services hereunder. The indemnity and defense provisions set forth herein shall indefinitely survive the termination of this Agreement.

The rights hereunder shall include the right to reasonable advances of defense expenses in the event of any pending or threatened litigation with respect to which indemnification hereunder may

ultimately be merited. In order that the indemnification provision contained herein shall apply, however, it is understood that if in any case the Trust may be asked to indemnify or hold the Administrator harmless, the Trust shall be fully and promptly advised of all pertinent facts concerning the situation in question, and it is further understood that the Administrator will use all reasonable care to identify and notify the Trust promptly concerning any situation which presents or appears likely to present the probability of such a claim for indemnification against the Trust, but failure to do so in good faith shall not affect the rights hereunder.

The Trust shall be entitled to participate at its own expense or, if it so elects, to assume the defense of any suit brought to enforce any claims subject to this indemnity provision. If the Trust elects to assume the defense of any such claim, the defense shall be conducted by counsel chosen by the Trust and satisfactory to the Administrator, whose approval shall not be unreasonably withheld. In the event that the Trust elects to assume the defense of any suit and retain counsel, the Administrator shall bear the fees and expenses of any additional counsel retained by it. If the Trust does not elect to assume the defense of a suit, it will reimburse the Administrator for the reasonable fees and expenses of any counsel retained by the Administrator.

The Administrator may apply to the Trust at any time for instructions and may consult counsel for the Trust or its own counsel and with accountants and other experts with respect to any matter arising in connection with the Administrator’s duties, and the Administrator shall not be liable or accountable for any action taken or omitted by it in good faith in accordance with such instruction or with the opinion of such counsel, accountants or other experts.

The Administrator shall be protected in acting upon any document which it reasonably believes to be genuine and to have been signed or presented by the proper person or persons. The Administrator will not be held to have notice of any change of authority of any officers, employees or agents of the Trust until receipt of written notice thereof from the Trust.

ARTICLE 7. Activities of the Administrator. The services of the Administrator rendered to the Trust are not to be deemed to be exclusive. The Administrator is free to render such services to others and to have other businesses and interests. It is understood that trustees, officers, employees and shareholders of the Trust are or may be or become interested in the Administrator, as officers, employees or otherwise and that partners, officers and employees of the Administrator and its counsel are or may be or become similarly interested in the Trust, and that the Administrator may be or become interested in the Trust as an owner of Trust shares or otherwise.

ARTICLE 8. Term. This Agreement shall become effective February 4, 2005 and, unless sooner terminated as provided herein, shall continue until October 31, 2005. Thereafter, if not terminated, this Agreement shall continue automatically for successive one year terms, provided that such continuance is specifically approved at least annually by the vote of a majority of those members of the Trust’s Board of Trustees who are not parties to this Agreement or interested persons of any such party. This Agreement may be terminated without penalty, on not less than 60 days prior written notice, by the Trust’s Board of Trustees or by the Administrator. The termination of this Agreement with respect to one Fund or Trust shall not result in the termination of this Agreement with respect to any other Fund or Trust.

ARTICLE 9. Assignment. This Agreement shall not be assigned by either party without the written consent of the other party; provided, however, that the Administrator may, at its expense, subcontract with any entity or person concerning the provision of the services contemplated hereunder. The Administrator shall not, however, be relieved of any of its obligations under this Agreement by the appointment of such subcontractor and provided further, that the Administrator shall be responsible, to the

extent provided in Article 6 hereof, for all acts of such subcontractor as if such acts were its own. This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and permitted assigns.

ARTICLE 10. Amendments. This Agreement may be amended by the parties hereto only if such amendment is specifically approved (i) by the vote of a majority of the Trustees of the Trust, and (ii) by the vote of a majority of the Trustees of the Trust who are not parties to this Agreement or interested persons of any such party.

For special cases, the parties hereto may amend such procedures set forth herein as may be appropriate or practicable under the circumstances, and the Administrator may conclusively assume that any special procedure which has been approved by the Trust does not conflict with or violate any requirements of its Declaration of Trust or then-current prospectuses, or any rule, regulation or requirement of any regulatory body.

ARTICLE 11. Certain Records. The Administrator shall maintain customary records in connection with its duties as specified in this Agreement. Any records required to be maintained and preserved pursuant to Rules 31a-1 and 31a-2 under the 1940 Act which are prepared or maintained by the Administrator on behalf of the Trust shall be prepared and maintained at the expense of the Administrator, but shall be the property of the Trust and will be made available to or surrendered promptly to the Trust on request.

In case of any request or demand for the inspection of such records by another party, the Administrator shall notify the Trust and follow the Trust’s instructions as to permitting or refusing such inspection; provided that the Administrator may exhibit such records to any person in any case where it is advised by its counsel that it may be held liable for failure to do so.

ARTICLE 12. Compliance with Rule 38a-1. The Administrator shall maintain policies and procedures that are reasonably designed to prevent violations of the federal securities laws, and shall employ personnel to administer the policies and procedures who have the requisite level of skill and competence required to effectively discharge its responsibilities. The Administrator shall also shall provide the Trust’s chief compliance officer with periodic reports regarding its compliance with the federal securities laws, and shall promptly provide special reports in the event of any material violation of the federal securities laws.

ARTICLE 13. Definitions of Certain Terms. The terms “interested person” when used in this Agreement, shall have the respective meanings specified in the 1940 Act and the rules and regulations thereunder, subject to such exemptions as may be granted by the Commission.

ARTICLE 14. Notice. Any notice required or permitted to be given by either party to the other shall be deemed sufficient if delivered to the other party at the following address: 1111 Polaris Parkway, Columbus, Ohio 43240, or at such other address as a party may from time to time specify in writing to the other party pursuant to this Section.

ARTICLE 15. Governing Law; Limitation of Liability of the Trustees and Shareholders. This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the State of Delaware. The obligations of the Trust (or particular series or class thereof) entered into in the name or on behalf thereof by any Trustee, representative or agent of the Trust (or particular series or class thereof) are made not individually, but in such capacities, and are not binding upon any Trustee, shareholder, representative or agent of the Trust (or particular series or class thereof) personally, but bind only the assets of the Trust (or particular series or class thereof), and all persons dealing with any

series and/or class of shares of the Trust must look solely to the assets of the Trust belonging to such series and/or class for the enforcement of any claims against the Trust (or particular series or class thereof).

The execution and delivery of this Agreement have been authorized by the Trustees, and this Agreement has been signed and delivered by an authorized officer of the Trust, acting as such, and neither such authorization by the Trustees nor such execution and delivery by such officer shall be deemed to have been made by any of them individually or to impose any liability on any of them personally, but shall bind only the trust property of the Trust (or particular series or class thereof) as provided in the Trust’s charter.

ARTICLE 16. Use of Confidential Information. Notwithstanding anything in this Agreement to the contrary:

The Administrator will keep confidential and will not use or disclose to any other party (including, but not limited to, affiliates of the Administrator) any Customer Information (as defined below), except as authorized in writing by the Trust or as appropriate in connection with performing this Agreement and subject to any conditions set forth elsewhere in the Agreement.

The Administrator will maintain appropriate physical, electronic and procedural safeguards to store, dispose of (if applicable) and secure Customer Information to protect it from unauthorized access, use, disclosure, alteration, loss and destruction. The safeguards used by the Administrator to protect Customer Information will be no less than those used by the Administrator to protect its own confidential information. In addition, the Administrator will comply with any other security safeguards required by this Agreement.

The Administrator will control access to Customer Information and, except as required by law or as otherwise may be specifically permitted by this Agreement, permit access only to individuals who need access in connection with performing this Agreement and will cause such individuals to maintain the confidentiality of Customer Information.

Except as necessary to conform to any record retention requirements imposed by this Agreement, the Company will, upon termination of this Agreement or the Trust’s earlier request, return to the Trust all Customer Information or destroy it, as specified by the Trust. The Administrator will provide to the Trust a destruction certificate if so required.

As between the Trust and the Administrator, Customer Information and all applicable intellectual property rights embodied in the Customer Information shall remain the property of the Trust.

The Administrator acknowledges that it has received and reviewed a copy of the Trust’s privacy policy applicable to Customer Information and it agrees that it will not act in a manner that is inconsistent with such policy.

Without limiting the foregoing, the Administrator shall not directly or through an affiliate, disclose any Customer Information, including account numbers, access numbers, or access codes for an account for use in telemarketing, direct mail marketing, or marketing through electronic mail, except as permitted by this Agreement, the Privacy Policy of the Trusts, and as permitted in Section 248.12 of Regulation S-P.

The term “Customer Information” as used in this Article means information, in any form, provided to the Administrator by on or behalf of the Trust that uniquely identifies in any way a current,

former or prospective Trust customer. Customer Information includes, but is not limited to, copies of such information or materials derived from such information.

ARTICLE 17. Counterparts. This Agreement may be executed by the parties on any number of counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the day and year first above written.


JPMORGAN INSTITUTIONAL TRUST

By:

Title:

Accepted by:

JPMORGAN FUNDS MANAGEMENT, INC.

By:

Title:

SCHEDULE A

SERIES OF THE TRUST

JPMorgan Ultra Short-Term Bond Trust

JPMorgan Short-Term Bond Trust

JPMorgan Intermediate Bond Trust

JPMorgan Core Bond Trust

JPMorgan Equity Index Trust

SCHEDULE B

The Administrator shall receive the following annual fee for administrative services provided to the Funds:

0.10% of average daily net assets of all Funds in the Trust

EX-99.H.3 6 dex99h3.htm PLACEMENT AGENCY AGREEMENT Placement Agency Agreement

Exhibit (h)(3)

PLACEMENT AGENCY AGREEMENT

JPMorgan Institutional Trust

522 Fifth Avenue

New York, NY 10036

TO: J.P. Morgan Institutional Investments Inc.

Re: Appointment as Placement Agent

Ladies and Gentlemen:

JPMorgan Institutional Trust, a Delaware statutory trust (the “Trust”), agrees with you as follows with respect to its series designated: (a) JPMorgan Equity Index Trust; (b) JPMorgan Intermediate Bond Trust; (c) JPMorgan Ultra Short-Term Bond Trust; (d) JPMorgan Short-Term Bond Trust; and (e) JPMorgan Core Bond Trust (each, a “Fund”, and collectively, the “Funds”):

1. Funds Offering.

Each Fund proposes to issue and to sell common shares of beneficial interest (“Shares”) in accordance with an Offering Memorandum issued by the Fund dated November 18, 2004, as amended from time to time (the “Offering Memorandum”). The Funds have been established primarily for investments by certain clients of J.P. Morgan Investment Management Inc. (“JPMIM”) and its affiliates who maintain one or more separately managed private accounts, and who are also “accredited investors,” as defined in Regulation D under the Securities Act of 1933, as amended (“Securities Act”).

2. Definitions.

All capitalized terms used in this Agreement that are not separately defined in this Agreement have the respective meanings set out in the Offering Memorandum.

3. Placement of Shares.

(a) Subject to the terms and conditions set forth in this Agreement, the Trust appoints you as a placement agent in connection with the placement of Shares of each Fund. Subject to the performance in all material respects by the Fund of its obligations under this Agreement, and to the completeness and accuracy in all material respects of all of the representations and warranties of the Trust contained in this Agreement, you accept such agency and agree on the terms and conditions set out in this Agreement to qualify subscribers for Shares. You will not have any liability to the Trust in the event that any subscriber fails to consummate the purchase of any Shares for any reason other than your willful misfeasance, bad faith, negligence or reckless disregard of your duties under this Agreement.

(b) The offers and sales of Shares are to be effected pursuant to the exemption from the registration requirements of the Securities Act, pursuant to Section 4(2) of that Act and Regulation D under that Act. Both you and the Trust have established the following procedures in connection with the offers and sales of Shares and agree that neither of you will make offers or sales of any Shares except in compliance with such procedures:

(i) Offers and sales of Shares will be made only in compliance with Section 4(2) of the Securities Act and Regulation D under that Act and only to investors that qualify as “accredited investors,” as defined in Rule 501(a) under that Act.

(ii) No sale of Shares to any one investor will be for less than the minimum denominations as may be specified in the Offering Memorandum; provided, that JPMIM may from time to time vary such minimum denominations with respect to individual investors or categories of investors.

(iii) No offer or sale of Shares may be made in any state or foreign jurisdiction, or to any prospective investor located in any state or foreign jurisdiction, where such Shares have not been registered or qualified for offer and sale under applicable state or foreign securities laws unless such Shares are exempt from the registration or qualification requirements of such laws. In all instances, the Trust will inform you of the permissible states and foreign jurisdictions with respect to offers and sales of Shares on behalf of each Fund. No offers or sales of Shares of any Fund may be made in any jurisdiction without the Trust’s advance approval.

(c) For purposes of the offering of Shares, the Trust has furnished to you copies of the Offering Memorandum and subscription documentation that will be furnished to prospective investors. Additional copies will be furnished in such numbers as you may reasonably request for purposes of the offering. You are authorized to furnish to prospective investors only such information concerning the Fund and the offering as may be contained in the Offering Memorandum or any written supplements to the Offering Memorandum, and such other materials as you have prepared and we have reviewed and approved. You will be responsible for the accuracy of any such other materials which you provide to prospective investors and you will ensure that all such other materials are in compliance with all applicable laws and regulations in all relevant states and jurisdictions. You will keep a record of each prospective investor to which or to whom you furnish a copy of the Offering Memorandum or other materials and will promptly provide us with such records at any time upon our written request.

4. Subscriptions for Shares.

(a) The Trust will offer Shares to investors for purchase (“Offerings”) subject to the restrictions stated in the Fund’s Offering Memorandum. The Trust expects that Offerings will occur continuously and that subscriptions for Shares will be accepted as of the end of each business day the Fund is open for business.

(b) All subscriptions for Shares and payments by subscribers of subscription amounts for Shares will be made in accordance with the terms and conditions set out in the Offering Memorandum and subscription documentation; provided that JPMIM may from time to time vary the minimum subscription amounts with respect to individual investors or classes of investors. Subscriptions will be subject to acceptance by JPMIM, as described in Section 5 below.

(c) All payments received by you under this Agreement for subscriptions in the name and on behalf of the Fund will be handled by you or your authorized agent in accordance with the terms of the subscription documentation.

(d) If JPMIM rejects any subscriptions, it will notify JPMorgan Chase Bank, as custodian for the Fund, or any other custodian or escrow agent, if applicable, who may be serving in such capacity at that time, to return all subscription payments to investors, plus accrued interest, if any.

5. Transmission of Subscriptions.

You are appointed as agent of the Trust for purposes of determining whether to transmit subscriptions for Shares to JPMIM. Subscriptions will be transmitted only if the investor: (a) has supplied properly completed subscription documentation; and (b) has made proper payment for Shares. Subscriptions will not be transmitted if it appears that any of the terms or conditions applicable to subscriptions for Shares as set out in the Offering Memorandum, the subscription documentation, or Section 3(b) of this Agreement have not been satisfied, in which case you will use reasonable efforts to obtain properly completed subscription documentation and any other necessary information. Properly completed subscription documentation will be promptly transmitted to JPMIM. JPMIM reserves the right to reject any subscriptions for Shares in a Fund and may, in its sole discretion, suspend subscriptions for Shares at any time and from time to time.

6. Eligibility and Suitability; Investor Servicing.

You are responsible for ensuring that each prospective investor is eligible to invest in the Trust and satisfies all the conditions set out in the Offering Memorandum, the subscription documentation and this Agreement and that an investment in the Trust is a suitable investment for such prospective investor. You agree to perform administrative and client servicing functions with respect to investors that you introduce to the Trust, including but not limited to: (a) responding to investor inquiries regarding account status and history, the manner in which purchases, tenders and transfers of Shares are effected and providing copies of the forms relating to such transactions required by the Trust to such investors; (b) passing on copies (without any amendment thereto) of all documents supplied by the Trust or their authorized agents for the information of or completion by investors, including but not limited to the Trust’s annual and semi-annual financial statements and its monthly and quarterly reports, to the extent such documents are not provided directly by the Trust to investors; and (c) other client servicing functions as you deem appropriate or as may be agreed with JPMIM from time to time.

7. Representations and Warranties of the Trust.

The Trust, on behalf of itself and each Fund, represents and warrants to you that:

(a) The Trust has been duly formed and is validly existing as a statutory trust under the laws of the State of Delaware with all requisite power and authority, all necessary authorizations, approvals, orders, licenses, certificates and permits of and from all governmental regulatory officials and bodies, and all necessary rights, licenses and permits from other parties, to conduct its business as described in the Offering Memorandum.

(b) The Trust engages in business as an open-end management investment company and is registered as such under the Investment Company Act of 1940, as amended (“1940 Act”).

(c) Shares in each Fund to be or which may be issued by the Trust have been duly authorized by the Trust for issuance and sale and, when issued and delivered by the Trust, Shares will conform in all material respects to all statements relating to Shares contained in the Offering Memorandum.

(d) The issuance and sale of Shares in each Fund by the Trust and the execution, delivery and performance of the Funds’ and the Trust’s obligations under this Agreement will not result in the violation of any applicable law.

(e) Each Fund will apply the proceeds from the sale of the Shares for the purposes set out in the Offering Memorandum.

(f) The Offering Memorandum does not contain an untrue statement of any material fact or omit to state any material fact necessary in order to make statements in the Offering Memorandum not misleading in light of the circumstances under which they were made.

(g) This Agreement has been duly authorized, executed and delivered by the Trust, on behalf of each Fund and, assuming your execution of the same, will constitute a valid and binding agreement of the Trust.

8. Covenants of the Trust.

The Trust covenants and agrees with you as follows:

(a) You will be furnished with such documents as you may reasonably require, from time to time, for the purpose of enabling you to pass upon the issuance and sale of Shares as contemplated in this Agreement and related proceedings, or in order to evidence the accuracy of any of the representations and warranties, or the fulfillment of any of the conditions contained in this Agreement.

(b) If, at any time, an event occurs that in the opinion of counsel to the Trust materially affects the Trust or any Fund and that should be set out in an amendment to the

Offering Memorandum in order to make the statements in the Offering Memorandum not misleading in light of the circumstances under which they are made, the Trust will notify you as promptly as practicable of the occurrence of the event and prepare and furnish to you copies of an amendment or supplement to the Offering Memorandum, in such reasonable quantities as you may request, in order that the Offering Memorandum will not contain any untrue statement of any material fact or omit to state a material fact which in the opinion of such counsel is necessary to make the statements in the Offering Memorandum not misleading in light of the circumstances under which they are made.

9. Representations and Warranties of the Placement Agent.

You represent and warrant that:

(a) You are duly authorized to enter into and perform, and have duly executed and delivered, this Agreement.

(b) You have maintained and will maintain all licenses and registrations necessary under applicable law and regulations (including the rules of the National Association of Securities Dealers, Inc. (“NASD”) to provide the services required to be provided by you under this Agreement.

(c) You have not solicited and will not solicit any offers to buy or offers to sell any of the Shares in any manner that would be inconsistent with applicable laws and regulations, or with the procedures for solicitations contemplated by the Offering Memorandum or this Agreement, in any manner that would constitute a general solicitation or general advertising with respect to the Shares, including, but not limited to, any seminar or meeting conducted whose attendees have been invited by any general solicitation or general advertising, or any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television, radio or other means of electronic communication, unless access to that communication is limited to those persons eligible to purchase Shares.

(d) You will furnish to each subscriber, identified either by you or the Trust, or otherwise confirm the receipt by such subscriber of, a current copy of the Offering Memorandum, including any current amendments to the Offering Memorandum provided to you by the Trust pursuant to Section 8(b) of this Agreement, the subscription documentation (in the case of a new subscriber), the additional subscription documentation (in the case of an existing shareholder), and any other such additional information as the Trust or JPMIM sees fit or as may be reasonably requested by the Trust or JPMIM or required by applicable law or regulation, prior to the subscriber’s admission as a shareholder of a Fund, or, in the case of an additional investment by an existing shareholder, prior to the acceptance of an additional subscription (to the extent such shareholder has not already received such documentation) from such existing shareholder.

10. Compensation of Placement Agent.

(a) Subject to any more specific terms that you may from time to time agree with JPMIM, you are not entitled to charge a sales commission on the purchase price of a Share.

(b) Except as may otherwise be agreed to by the Trust, you will be responsible for the payment of all costs and expenses incurred by you in connection with the performance of your obligations under this Agreement, including the costs associated with the preparation, printing and distribution of any sales materials (other than those costs associated with preparing and updating the Offering Memorandum, which costs will be borne by the Trust) and ensuring the compliance of such subscription materials with all applicable laws and regulations, and the costs of performing the obligations set out in Section 6 above. You must receive the approval of JPMIM prior to the distribution of any sales materials.

11. Indemnification.

The parties agree to indemnify one another as follows:

(a) The Trust, on behalf of each Fund, agrees to indemnify and hold harmless you and each person who controls you within the meaning of Section 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) or Section 15 of the Securities Act (“controlling person”) against any and all losses, liabilities, claims, damages and expenses whatsoever (including, but not limited to, attorneys’ fees and any and all expenses whatsoever incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation) (“Losses”, and individually, a “Loss”) to which you or a controlling person may become subject under the Securities Act, the Exchange Act or any other law or statute in any jurisdiction, insofar as such Losses (or actions in respect of such Losses) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Offering Memorandum or the subscription documentation as such documents may be amended or supplemented from time to time, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Trust will not be liable to you or any controlling person in any case to the extent, but only to the extent, that any such Loss arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Trust by you or through you expressly for the use therein; and further provided that this indemnity will not protect you or any other person who may otherwise be entitled to indemnity under this Agreement from or against any liability to which you or they would be subject by reason of your own or their own willful misfeasance, bad faith, negligence or reckless disregard of your or their duties under this Agreement. Any determination by the Trust, on behalf of any Fund, to indemnify you for the foregoing liabilities will be made in accordance with the requirements of Section 17 of the 1940 Act. This indemnity will be in addition to any liability that the Trust, on behalf of any Fund, may otherwise have incurred under this Agreement.

(b) You agree to indemnify and hold harmless the Trust, on behalf of the affected Fund(s), its Trustees, JPMIM, and each controlling person of the Fund(s) against any Losses to which you or they may become subject under the Securities Act, the Exchange Act or any other law or statute in any jurisdiction, insofar as such Losses (or actions in respect of such Losses) arise out of or are based upon a breach by you of any of the covenants, agreements, representations or warranties contained in this Agreement, or upon any untrue statement or alleged untrue statement of a material fact made by you, or an omission or alleged omission to state a material fact necessary to make a statement made by you, in the light of the circumstances under which it was made, not misleading, in connection with your placement of Shares; provided, however, that you will not be liable to a Fund or any controlling person of that Fund in any case to the extent, but only to the extent, that any such Loss arises out of or is based upon a statement by you in reliance on or in conformity with the Offering Memorandum or the subscription documentation, as such documents may be amended or supplemented from time to time, or other written information furnished to you or on your behalf through you by the Fund expressly for use in connection with the placement of Shares. This indemnity will be in addition to any liability that you may otherwise have incurred under this Agreement.

(c) Promptly after receipt by an indemnified party under Section 11(a) or (b) of this Agreement of notice of the commencement of any action, the indemnified party will, if a claim in respect of the action is to be made against the indemnifying party under Section 11(a) or (b) of this Agreement, notify the party against whom indemnification is to be sought in writing of the commencement of the action. The failure so to notify an indemnifying party will not relieve it from any other liability which it may have otherwise than under this Section 11. In case any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencement of the action, the indemnifying party will be entitled to participate in the action and, to the extent it may elect by written notice delivered to the indemnified party promptly after receiving the notice from the indemnified party, to assume the defense of the action with counsel reasonably satisfactory to the indemnified party; provided, however, that if, in the reasonable judgment of the indemnified party, a conflict of interest exists where it is advisable for the indemnified party to be represented by separate counsel, the indemnified party will have the right to employ separate counsel in any such action, in which event the fees and expenses of the separate counsel will be borne by the indemnifying party or parties. After notice from the indemnifying party to the indemnified party of its election to assume such defense and the approval by the indemnified party of counsel, the indemnifying party will not be liable to the indemnified party under Section 11(a) and (b) of this Agreement for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by the indemnified party, in connection with the defense of such action other than reasonable costs of investigation unless (i) the indemnified party will have employed separate counsel in accordance with this Section 11(c) (it being understood, however, that the indemnifying party or parties will not be liable for the expenses of more than one separate counsel representing the indemnified parties under Section 11(a) of this Agreement who are parties to such action), (ii) the indemnifying party or parties will not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action or (iii) the indemnifying party or parties have authorized the employment of counsel for the indemnified

party at the expense of the indemnifying party or parties; and except that, if clause (i) or (iii) is applicable, liability for expenses will be only in respect of the counsel referred to in such clause (i) or (iii). No indemnifying party will, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought under this Agreement by the indemnified party, unless such settlement includes an unconditional release of the indemnified party from all liability on claims that are the subject matter of the proceeding.

12. Representations and Indemnities to Survive Delivery.

The representations, warranties and other statements of the parties and their officers set out in or made in accordance with this Agreement, and the indemnities contained in Section 11 of this Agreement, will remain in full force and effect, regardless of (a) any termination of this Agreement, (b) any investigation made by or on behalf of you, or the Fund, JPMIM, any Trustees of the Fund or directors or officers of any of the foregoing or any person controlling any of the foregoing, and (c) acceptance of any payments for Interests under this Agreement. The provisions of this Section 12 will survive the termination or cancellation of this Agreement.

13. Intellectual Property Rights.

(a) For purposes of this clause:

(i) “IPR” means all intellectual property rights including, without limitation, copyrights, design rights, patent rights, know-how, trade marks, business names, domain names and copyrights in computer software belonging to the Trust.

(ii) “Promotional Materials” means all materials used in the advertising and promotion of the Trust including, without limitation, brochures, web sites and the Offering Memorandum, whether in paper, electronic or other form.

(iii) “Trade Marks” means the registered and unregistered trade marks and trade mark applications that the Trust or JPMIM may license to you to use in a territory in respect of the Trust or any of the Funds.

(b) The Trust and JPMIM hereby grant to you the non-exclusive right to use the Trade Marks and other IPR in the Promotional Materials for the purpose of advertising, promoting and selling the Funds in accordance with the terms of and for the duration of this Agreement.

(c) The ownership of any and all IPR that exists in the Promotional Materials and the Trust, howsoever disseminated or used by you, including any changes, adaptations, modifications or improvements to the Promotional Materials or the Trust, will remain the property of the Trust and will not vest in you or any of your officers, employees, delegates or agents.

(d) The Trust and JPMIM make no representations or warranties as to the validity or enforceability of the Trade Marks or other IPR nor as to whether the same infringe upon any intellectual property rights of third parties.

(e) You will enter into any document necessary for the recording, registration or safeguarding of IPR and for the assignment to the Trust of rights in the changes, adaptations, modifications or improvements referred to in Section 13(c) of this Agreement.

14. Effective Date and Term of Agreement.

This Agreement will become effective for all purposes as of the date of its execution and will remain in effect for an initial term of one year from such date, unless terminated by either party in accordance with the terms of this Agreement. Thereafter, this Agreement will continue in effect from year to year, provided that each continuance is approved by the Trustees of the Trust, including the vote of a majority of the Trustees who are not “interested persons” of the Trust, as that term is defined by the 1940 Act and the rules under that Act.

15. Termination; Assignment; Successors.

(a) Either party may terminate this Agreement without cause by written notice to the other on not less than thirty (30) days’ notice, or, if there has been a material breach of any condition, warranty, representation or other term of this Agreement, by written notice from the non-breaching party to the party in breach at any time. The termination of this Agreement with respect to any one Fund will not result in the termination of this Agreement with respect to any other Fund.

(b) This Agreement will automatically terminate in the event of its “assignment” as that term is defined in the 1940 Act and the rules thereunder.

(c) It is specifically contemplated that this Agreement may be transferred by the Placement Agent to an entity under common control with the Placement Agent without the prior consent of the Trust, provided that any such successor entity is duly licensed and qualified to provide all of the services of the Placement Agent as described in this Agreement. This Agreement shall be binding on and shall inure to the benefit of the parties to this Agreement and their respective successors and permitted assigns.

16. Delegation of Powers.

You will be entitled to delegate all or any of your duties, functions or powers under this Agreement to another person or persons as sub-agent or sub-agents subject to the approval of JPMIM. You will be solely responsible, however, for the acts and omissions of any such sub-agent as if such acts or omissions were your own and for the payment of any remuneration to such sub-agent.

17. Notices.

Any notice, consent, instruction or other instrument or communication required or permitted to be given hereunder by a party may be delivered in person, sent by courier service or certified or registered post, postage-prepaid, faxed or transmitted via e-mail to the address of the other parties set forth below or such other address as may be notified in writing to the other parties, and shall be deemed to have been properly delivered or given hereunder and shall be effective on: (i) the date of delivery if delivered in person or sent by Federal Express or other recognized courier who obtains a signature acknowledging receipt; (ii) the date of transmission, if faxed or transmitted via e-mail, provided that receipt of a facsimile or e-mail is verified by telephone (and failing such verification, only upon actual receipt); or (iii) five days after the same has been tendered for delivery by the post if sent by certified or registered post, postage prepaid.

If to the Placement Agent:

J.P. Morgan Institutional Investments Inc.

522 Fifth Avenue, 22^nd Floor

New York, NY 10036

Attention: James A. Hoffman

If to the Trust:

JPMorgan Institutional Trust

522 Fifth Avenue, 16^th Floor

New York, NY 10036

Copy to:

J.P. Morgan Investment Management Inc.

522 Fifth Avenue, 16^th Floor

New York, NY 10036

Attention: Ric P Butler II

18. Miscellaneous.

(a) This Agreement may be executed in two or more counterparts, each of which when so executed and delivered will constitute one and the same instrument. This Agreement will inure to the benefit of and be binding upon the parties to this Agreement and their respective successors and assigns and no other person will have any right or obligation under this Agreement.

(b) This Agreement supersedes all prior agreements and understandings relating to the subject matter of this Agreement, and neither this Agreement nor any of its terms may be changed, waived, discharged or terminated except by an instrument in writing signed by the party against whom enforcement of the change, waiver, discharge or termination is sought. The headings in this Agreement are for purposes of reference only and will not limit or otherwise affect the meaning of this Agreement.

19. Governing Law.

This Agreement will be governed by and construed in accordance with the laws of the State of New York without regard to the conflicts of laws provisions of such laws, and with the provisions of the 1940 Act. In the event of any conflict between the provisions of the laws of New York and those of the 1940 Act, the 1940 Act provisions will control.

20. Bound Parties.

The parties to this Agreement agree that the obligations of any Fund under this Agreement will not be binding upon any Trustees or shareholders of the Trust or that Fund, or upon any officers, employees or agents, whether past, present or future, of the Fund, individually, or upon any other Fund, but are binding only upon the assets and property of that Fund.

If the foregoing correctly sets out our understanding with you, please indicate your acceptance in the space provided below.


Very truly yours,

JPMORGAN INSTITUTIONAL TRUST

By:		/s/ Scott E. Richter
Name:		Scott E. Richter
Title:		Secty & Chief Legal Officer
Date:		12/15/04

Agreed to and accepted:


J.P. MORGAN INSTITUTIONAL INVESTMENTS INC.

By:		/s/ James Hoffman
Name:		James Hoffman
Title:		Vice President
Date:		12/15/04

EX-99.H.4 7 dex99h4.htm SECURITIES LENDING AGREEMENT Securities Lending Agreement

Exhibit (h)(4)

SECURITIES LENDING AGREEMENT (“Lending Agreement”), dated as of September 26, 2005, among JPMorgan Chase Bank, N.A. (“Bank”), having its principal place of business at 270 Park Avenue, New York, New York 10017-2070 and JPMorgan Institutional Trust on behalf of each of the JPMorgan Funds listed on Exhibit A hereto (each, a “Lender”), having its principal place of business at 522 Fifth Avenue, New York, New York 10036.

It is hereby agreed as follows:

Section 1 - Definitions

Unless the context clearly requires otherwise, the following words shall have the meanings set forth below when used herein:

“Account” shall mean the securities account established and maintained by Bank on behalf of Lender pursuant to a separate custody agreement (“Custody Agreement”), between Bank and the Lender, which Custody Agreement provides, inter alia, for the safekeeping of Securities received by Bank from time to time on behalf of Lender.

“Adviser” means the investment adviser of Lender as identified on Exhibit A. Unless notified to the contrary by Lender, actions taken by, and Proper Instructions given by, Adviser may be deemed by Bank to be taken or given by Lender and notices provided by Bank to Adviser shall be deemed received by Lender. Lender shall promptly notify Bank of any change in the identity of the Adviser.

“Affiliate” shall mean an entity controlling, controlled by, or under common control with, Bank.

“Authorized Investment” shall mean any type of instrument, security, participation or other property in which Cash Collateral may be invested or reinvested, as described in Section 5(e) hereof and Appendix 1 hereto (and as such Appendix may be amended from time to time by written agreement as provided herein).

“Authorized Person” shall mean, except to the extent that Bank is advised to the contrary by Proper Instruction, any person (typically an employee of Adviser) who is authorized to give instructions to Bank pursuant to the Agreement and any mandates given to Bank in connection with such Agreement. An Authorized Person shall continue to be so until such time as Bank receives Proper Instructions that any such person is no longer an Authorized Person.

“Borrower” shall mean an entity listed on Appendix 2 hereto other than any entity which Bank shall have been instructed to delete from such list pursuant to Written Instructions and as such Appendix may be amended in accordance with Section 4(b) hereof.

“Business Day” shall have the meaning assigned thereto in the applicable MSLA, including any applicable Addendum or Exhibit thereto and shall, include, as applicable, a New York Business Day and a Foreign Business Day.

“Cash Collateral” shall mean fed funds and such U.S. currency as may be pledged by a Borrower in connection with a particular Loan.

“Collateral” shall mean the types of collateral acceptable to Lender as set forth in Appendix 3 hereto. As of the date hereof, Appendix 3 is limited to Cash Collateral.

“Collateral Account” shall mean, as the case may be, an account maintained by Bank with itself, with any Depository or with any Triparty Institution and designated as a Collateral Account for the purpose of holding any one or more of Collateral, Authorized Investments, and Proceeds in connection with Loans hereunder.

“Collateral Amount” shall have the meaning assigned thereto in Section 5(c) hereof.

“Collateral Requirement” shall have the meaning assigned thereto in Section 5(c) hereof.

“Custody Agreement” shall have the meaning assigned thereto in the definition of Account.

“Depository” shall mean: (i) The Depository Trust Company, and any other securities depository or clearing agency (and each of their respective successors and nominees) registered with the U.S. Securities and Exchange Commission or registered with or regulated by the applicable foreign equivalent thereof or otherwise able to act as a securities depository or clearing agency, (ii) any transnational depository, (iii) the Federal Reserve book-entry system for the receiving and delivering of U.S. Government Securities, and (iv) any other national system for the central handling of that country’s government securities.

“Distributions” shall have the meaning assigned thereto in Section 3(b)(v) hereof.

“Dollars” shall have the meaning assigned thereto in Section 5(c) hereof.

“Loan” shall mean a loan of Securities hereunder.

“Loan Fee” shall mean the amount payable by a Borrower to Bank pursuant to the applicable MSLA in connection with Loans collateralized other than by Cash Collateral.

“Market Value” shall have the meaning assigned thereto in Section 7(c)(iii) hereof.

“MSLA” shall mean a master securities lending agreement or securities borrowing agreement between Bank and a Borrower, pursuant to which Bank lends securities on behalf of its customers (including Lender) from time to time. A copy of Bank’s standard forms of MSLA, including (as applicable) the international addendum thereto, are annexed (i) as Appendix 5A in the case of borrowers located in the United States, and (ii) as Appendix 5B in the case of borrowers located outside the United States. (The location of each Borrower is indicated in Appendix 2.)

“Non-U.S. Securities” shall mean Securities other than “U.S. Securities” as defined below, and shall include Global Depositary Receipts.

“Oral Instructions” shall have the meaning assigned thereto in Section 10 hereof.

“Proceeds” shall mean interest, dividends and other payments and Distributions received by Bank in connection with Authorized Investments.

“Proper Instructions” shall mean Oral Instructions and Written Instructions.

“Rebate” shall mean the amount payable by Bank on behalf of Lender to a Borrower in connection with Loans collateralized by Cash Collateral, which shall be a percentage of the Cash Collateral as agreed by the Borrower and Bank.

“Return Date” shall have the meaning assigned thereto in Section 7(c)(i) hereof.

aa)

“Securities” shall mean government securities (including U.S. Government Securities), equity securities, bonds, debentures, other corporate debt securities, notes, mortgages or other obligations, and any certificates, warrants or other instruments representing rights to receive, purchase, or subscribe for the same, or evidencing or representing any other rights or interests therein and held pursuant to the Custody Agreement.

bb)

“Term Loan” shall have the meaning assigned thereto in Section 5(h) hereof.

cc)

“Triparty Institution” shall mean a financial institution qualified to act as a custodian under the Investment Company Act of 1940 and the rules and regulations thereunder (“ ‘40 Act”) with which Bank shall have previously entered a triparty agreement among itself, such Triparty Institution and a particular Borrower providing, among other things, for the holding of Collateral in a Collateral Account at such Triparty Institution in Bank’s name on behalf of Bank’s lending customers and for the substitution of Collateral; provided, however, that any substituted Collateral shall meet the then standards for acceptable Collateral set by Bank.

dd)

“U.S. Government Securities” shall mean book-entry securities issued by the U.S. Treasury (as defined in Subpart 0 of Treasury Department Circular No. 300 and any successor provisions) and any other securities issued or fully guaranteed by the United States government or any agency, instrumentality or establishment of the U.S. government, including, without limitation, securities commonly known as “Ginnie Maes,” “Sally Maes,” “Fannie Maes” and “Freddie Macs”.

ee)

“U.S. Securities” shall mean Securities issued by an issuer that is organized under the laws of the United States or any State thereof or that are otherwise traded in the United States, and shall include American Depositary Receipts.

ff)

“Written Instructions” shall have the meaning assigned thereto in Section 10 hereof.

Section 2 - Appointment. Authority

(a) Appointment. Lender hereby appoints Bank as its agent to lend Securities in the Accounts on Lender’s behalf on a fully disclosed basis to Borrowers from time to time in accordance with the terms hereof and on such terms and conditions and at such times as Bank shall determine and Bank may exercise all rights and powers provided under any MSLA as may be incidental thereto, and Bank hereby accepts appointment as such agent and agrees to so act.

(b) Authority. Lender hereby authorizes and empowers Bank to execute in Lender’s name and on its behalf and at its risk all agreements and documents as may be necessary to carry out any of the powers herein granted to Bank. Lender grants Bank the authority set forth herein notwithstanding its awareness that Bank: (1) in its individual capacity or acting in a fiduciary capacity for other accounts, may have transactions with the same institutions to which Bank may be lending Securities hereunder, which transactions may give rise to actual or potential conflict of interest situations; and (2) may use EquiLend, a securities lending platform in which Bank has an equity interest (and therefore a financial interest in its success), to transact certain Loans with Borrowers that are EquiLend participants (it being understood that EquiLend will neither act as principal in, nor guarantee, any such Loan).. Bank shall not be bound to: (i) account to Lender for any sum received or profit made by Bank for its own account or the account of any other person or (ii) disclose or refuse to disclose any information or take any other action if the same would or might in Bank’s judgment, made in good faith, constitute a breach of any law or regulation or be otherwise actionable with respect to Bank; provided that, in circumstances mentioned in (ii) above, Bank shall promptly inform Lender of the relevant facts (except where doing so would, or might in Bank’s judgment, made in good faith, constitute a breach of any law or regulation or be otherwise actionable as aforesaid).

Section 3 - Representations and Warranties

(a) Representations of each party. Each party hereto represents and warrants to the other that: (i) it has the power to execute and deliver this Lending Agreement, to enter into the transactions contemplated hereby, and to perform its obligations hereunder; (ii) it has taken all necessary action to authorize such execution, delivery, and performance; (iii) this Lending Agreement constitutes a legal, valid, and binding obligation enforceable against it; and (iv) the execution, delivery, and performance by it of this Lending Agreement shall at all times comply with all applicable laws and regulations.

(b) Representations of Lender. Lender represents and warrants to Bank that: (i) this Lending Agreement is, and each Loan shall be, legally and validly entered into, and does not and shall not violate any statute, regulation, rule, order or judgment binding on Lender, or any provision of Lender’s charter or by-laws, or any agreement binding on Lender or affecting its property; (ii) the person executing this Lending Agreement and all Authorized Persons acting on behalf of Lender has and have been duly and properly authorized to do so; (iii) it is lending Securities as principal and shall not transfer, assign or encumber its interest in, or rights with respect to, any Securities available for Loan hereunder; (iv) it is the beneficial owner of all Securities or otherwise has the right to lend Securities; and (v) it is entitled to receive all interest, dividends and other distributions (including, but not limited to, payments made by the depositary in connection with American Depositary Receipts and Global Depositary Receipts ) (“Distributions”) made by the issuer with respect thereto. Lender shall promptly identify to Bank by notice, which notice may be oral, any Securities that are no longer subject to the representations contained in (b).

(c) Representations of Lender in respect of the MSLAs. Lender further represents and warrants to Bank that the representations and warranties to be given by Bank on Lender’s behalf as set out in the MSLAs are true and will continue to be true at all times until termination of Bank’s authority to act as Lender’s agent as provided in this Lending Agreement.

Section 4 - Borrowers

(a) MSLA. Lender hereby acknowledges receipt of the forms of MSLA (as set forth in Appendices 5A and 5B) and authorizes Bank to lend Securities in the Account to Borrowers thereunder pursuant to an agreement substantially in the form thereof.

(b) Borrowers. Securities may be lent to any Borrower listed in Appendix 2, as such Appendix may be updated from time to time to add new Borrowers and to delete entities that have ceased to be potential Borrowers. Either Lender or Adviser (with the Adviser acting hereunder in its capacity as an Authorized Person) shall have full discretion to remove any borrower from Appendix 2 upon five Business Days’ written notice to Bank. Bank shall provide Adviser and Lender with notice of each proposed addition of a Borrower to such list. If Lender or Adviser (in its capacity as an Authorized Person) notifies Bank in writing within five Business Days from the date of any such notice that it objects to a potential Borrower, no Loans of Securities shall be made to such potential Borrower. If Lender or Adviser does not so object within such five Business Day period, each potential Borrower notified to Lender and Adviser by Bank shall be deemed acceptable to Lender as of the expiration of such five Business Day period.

Section 5 - Loans

(a) Securities to be lent. Lending opportunities. Loan initiation. All Securities of Lender held by Bank that are issued, settled or traded in the markets that have been approved by Bank from time to time for purposes of Bank’s discretionary securities lending program shall be subject to the terms hereof unless Lender or Adviser (in its capacity as an Authorized Person) notifies the Bank in writing to the contrary. Bank shall seek to assure that Lender receives a fair allocation of lending opportunities vis-à-vis other lenders, taking into account the demand for and availability of Securities, types of Collateral, eligibility of Borrowers, limitations on investments of Cash Collateral, tax treatment, and similar commercial factors. From time to time, Bank may lend to Borrowers Securities held in the Account (except Securities that Lender has notified to Bank are unavailable or Securities that are no longer subject to the representations set forth in Section 3) and shall deliver such Securities against receipt of Collateral in accordance with the applicable MSLA. Bank shall have the right to decline to make any Loans to any Borrower and to discontinue lending to any Borrower in its sole discretion and without notice to Lender.

(b) Receipt of Collateral. Collateral substitution. For each Loan, Bank or a Triparty Institution shall receive and hold all Collateral required by the applicable MSLA in a Collateral Account, and Bank is hereby authorized and directed, without obtaining any further approval from Lender, to invest and reinvest all or substantially all Cash Collateral in accordance with Appendix 1 as promptly as practicable. Bank shall credit, or where applicable shall have a Triparty Institution credit, all Collateral, Authorized Investments and Proceeds to a Collateral Account and Bank shall

mark its books and records to identify Lender’s interest therein, it being understood, however, that all monies credited to a Collateral Account may for purposes of investment be commingled with cash collateral held for other lenders of securities on whose behalf Bank may act (it being understood that such commingling shall be only to the extent permitted by applicable law, regulations and interpretations thereof). Bank may, in its sole discretion, liquidate any Authorized Investment and credit the net proceeds to a Collateral Account. Bank shall accept substitutions of Collateral acceptable under Appendix 1 in accordance with the applicable MSLA, and shall credit, or where applicable shall have a Triparty Institution credit, all such substitutions to a Collateral Account.

(c) Mark to market procedures. (i) Bank shall require initial Collateral for a Loan in an amount determined by applying the then applicable “Collateral Requirement” (as defined below) to the Market Value of the Security that is the subject of the Loan together with, in the case of fixed income Securities, any accrued but unpaid interest thereon. The “Collateral Requirement” with respect to a given Security shall be an amount equal to the then applicable percentage (currently 102% where securities and the collateral therefor are denominated in the same currency, and 105% for all other securities) of the Market Value of the Security which is the subject of a Loan as determined as of the close of trading on the preceding Business Day; provided, however, that with respect to Securities such as U.S. Treasury strips and bills, where the market functions to not allow for the sale of such Securities at greater than par, the Collateral Requirement shall equal the lesser of 100% of the par value of the Security or 102% of its Market Value. (ii)(A) With respect to each Loan of Securities denominated in U.S. dollars (“Dollars”) if, and only if, the aggregate Market Value of the Collateral held by Bank on behalf of Lender for such Loan on any Business Day is less than the aggregate Market Value of the Securities which are the subject of such Loan (together with accrued but unpaid interest in the case of fixed income Securities, but in any event exclusive of any diminution in the value of Cash Collateral investments), Bank shall demand, as needed, on each such Business Day on behalf of Lender, that the Borrower, provide additional Collateral in accordance with the applicable MSLA (it being acknowledged that pursuant to the forms of MSLA, Collateral shall be delivered by a Borrower by the close of the Business Day following the Business Day on which a Collateral demand is made by Bank). Such additional Collateral demanded, together with the Collateral then held by Bank on behalf of Lender for such Loan, shall be not less than the applicable Collateral Requirement. (B) With respect to all loans of Securities denominated other than in Dollars from all lenders to a given Borrower (including Loans made hereunder), each Business Day Bank shall determine if the Market Value of all Collateral received by Bank from that Borrower in connection with all such loans is at least equal to the aggregate amount (“Collateral Amount”) determined by applying the applicable Collateral Requirement to each Security denominated other than in Dollars on Loan to such Borrower from all lenders. If the Market Value of the Collateral held for any individual Security falls below the Market Value of such Security, or if the Market Value of all Collateral received from a given Borrower in respect of such Loans is not at least equal to the Collateral Amount, Bank shall demand, as needed, on each such Business Day on behalf of Lender, that Borrower provide additional Collateral in accordance with the applicable MSLA so as to meet the Collateral Amount by marking specific Loans (it being acknowledged that pursuant to the forms of MSLA, Collateral shall be delivered by a Borrower by the close of the Business Day following the Business Day on which a Collateral demand is made by Bank). In respect of the forgoing, additional Collateral shall not be demanded to the extent that a Collateral shortfall is on account of a diminution in the value of Cash Collateral investments. In accordance with general market practice, the Market Value of certain Securities (including, without limitation, U.S. Government Securities), whether on Loan or received as Collateral, may be determined on a

same day basis by reference to recognized pricing services. Bank may from time to time establish de minimis guidelines with respect to Collateral pursuant to which a mark to market would not be made even where otherwise required hereunder.

(d) Changes in procedures applicable to Collateral. The Collateral procedures set forth in Sections 5(b)-(c) above reflect Bank’s current practice and may be changed by Bank from time to time based on general market conditions (including volatility of Securities on Loan and of securities Collateral, if and when taken), the Market Value of Securities on Loan to a given Borrower, and in accordance with general market practice and regulatory requirements. Bank shall notify Adviser (in its capacity as an Authorized Person) Lender of material revisions to the foregoing procedures. Unless Adviser (acting in its capacity as an Authorized Person) or Lender objects in writing, such change shall be deemed acceptable to Lender. No change will be effective if objected to by Adviser or Lender; it being understood that Bank may terminate this Lending Agreement forthwith on notice to Lender if Lender does not accept any such change.

(e) Investment of Cash Collateral. (i) Bank is hereby authorized to invest and reinvest Cash Collateral in accordance with the investment guidelines annexed hereto as Appendix 1. Appendix 1 may be amended at any time by Lender or Adviser to delete types of permissible investments upon five Business Days’ prior notice to Bank. Appendix 1 may also be amended by written agreement between Lender or Adviser (acting in its capacity as an Authorized Person) and Bank. (ii) Authorized Investments are made for the account of, and at the sole risk of, Lender. In that connection, Lender shall pay to Bank on demand in cash an amount equal to any deficiency in the amount of Collateral available for return to a Borrower pursuant to the applicable MSLA. Bank is authorized to select brokers and dealers for the execution of trades in connection with the investment of Cash Collateral, which broker or dealer may (subject to the ‘40 Act) be an Affiliate of Bank provided that a competitive execution price is obtained.

(f) Distributions and Voting Rights.

(i) Bank shall credit the Account on payable date with the amount of all cash Distributions (but for purposes of this Section 5(f) and Section 7(b) hereof, the term “cash Distributions” shall not include any principal payment, whether paid upon the maturity of any debt Security or prior to its maturity) with respect to Securities on Loan over their record date that Lender would have received under the Custody Agreement had such Securities not been on Loan over record date; provided, that with respect to Non-U.S. Securities, Bank’s obligation to credit the Account shall extend only to record dates (and Distributions made during the period of the relevant Loan) up to and including the date of any Event of Default (as defined in the applicable MSLA). To the extent that cash Distributions are not delivered to Bank by Borrower and Bank has so credited the Account with such Distributions, Bank shall be subrogated to Lender’s rights against Borrower as provided in Section 7(d). In connection with the foregoing, Lender shall promptly return any amount so credited upon oral or written notification from Bank that: (a) such amount has not been paid by the issuer of the Securities or the paying agent therefor (as applicable) in the ordinary course of business or (b) such amount was incorrectly credited. If Lender does not promptly return any amount upon such notification, Bank shall be entitled, upon oral or written notification to Lender, to reverse such credit by debiting the Account for the amount previously credited.

(ii) (a) Any non-cash Distribution which is in the nature of a stock split or a stock dividend shall be added to the existing Loan to which such dividend relates as of the date such non-cash

Distribution is payable and shall be subject to the provisions hereof and the applicable MSLA. (b) Any non-cash Distribution which is in the nature of warrants or rights to purchase shares made with respect to any Securities on Loan shall be deemed to be a new Loan made by Lender to Borrower (and shall be considered to constitute Securities on Loan) as of the date such non-cash Distribution is payable and shall be subject to the provisions hereof; provided that Lender or Adviser (acting in its capacity as an Authorized Person) may, by giving Bank ten (10) Business Days’ notice prior to the date of such non-cash Distribution (or such different amount of time as Bank may from time to time require on advice to Lender), direct Bank to request that the Borrower deliver such non-cash Distribution to Bank pursuant to the applicable MSLA, in which case Bank shall credit such non-cash Distribution to the Account. (c) If, despite (a) and (b) Lender or Adviser (acting in its capacity as an Authorized Person) requests that Bank instruct the Borrower to deliver a non-cash Distribution on its payable date, and Borrower fails so to deliver the non-cash Distribution, the indemnity provisions and corresponding subrogation rights set forth in Section 7 shall apply.

(iii) During the term of any Loan, Bank shall permit the Securities on Loan to be transferred into the name of and be voted by the Borrower or others. Lender shall not be entitled to: (a) participate in any dividend reinvestment program with respect to Securities that are eligible for Loan (whether or not actually on Loan) as of the applicable record date for such Securities or (b) vote proxies with respect to Securities that are on Loan as of the applicable record date for such Securities. In those markets where it is not practical or permissible to do so (e.g., Finland, Norway and Sweden), Lender shall not be entitled to vote proxies with respect to Securities that are eligible for Loan (but not actually on Loan) as of the applicable record date for such Securities. Notwithstanding the foregoing, Lender or Adviser (acting in its capacity as an Authorized Person) shall be entitled to instruct Bank to recall Securities on Loan to vote proxies (it being understood and agreed that in such cases the right to vote shall be contingent on such Securities being received back from Loan prior to any applicable proxy voting deadlines imposed by the issuer and Bank). Lender or Adviser (acting in its capacity as an Authorized Person) may also request that Bank obtain from a Borrower a commitment to vote or consent as directed with respect to a material event affecting Securities on Loan when Lender or Adviser (acting in its capacity as an Authorized Person) believes it necessary to so vote or consent, it being understood, however, that a Borrower has no obligation to so vote or consent and may, in some circumstances, be unable to do so.

(g) Advances, overdrafts and indebtedness. Security Interest. Bank may, in its sole discretion, advance funds on behalf of Lender in order to pay to Borrowers any Rebates or to return to Borrowers Cash Collateral to which they are entitled pursuant to the applicable MSLA. Lender shall repay Bank on demand the amount of any advance or any other amount owed by Lender hereunder. Any such advance shall bear interest at the rate customarily charged by Bank for such advances at the time such advance is made. In order to secure repayment of any advance or other indebtedness of Lender to Bank arising hereunder, Bank shall have a continuing lien and security interest in and to all assets now or hereafter held in the Account and any Collateral Account (to which Lender is entitled hereunder) and any other property at any time held by it for the benefit of Lender or in which Lender may have an interest which is then in Bank’s possession or control or in the possession or control of any third party acting on Bank’s behalf. In this regard, Bank shall be entitled to all the rights and remedies of a pledgee under common law and a secured party under the New York Uniform Commercial Code and/or any other applicable laws and/or regulations as then in effect.

(h) Termination of a Loan. (i) Loans shall generally be terminable on demand. With the prior approval of Lender, however, Loans may be made on the basis of a reasonably anticipated termination date (“Term Loan”) and without providing for the right of substitution of equivalent securities. Termination of a Term Loan prior to its anticipated termination date by either Lender or Borrower may result in the terminating party having to pay the non-terminating party damages based on the cost of obtaining a replacement loan. (ii) Bank shall terminate any Loan of Securities to a Borrower as soon as practicable after: (a) receipt by Bank of a notice of termination of the respective MSLA; (b) receipt by Bank of Written Instructions directing it to terminate a Loan; (c) receipt by Bank of Written Instructions instructing it to delete from Appendix 2 the Borrower to which such Loan was made; (d) receipt by Bank of Written Instructions advising that the Security subject to a Loan is no longer subject to the representations contained in Section 3 hereof; (e) receipt by Bank of notice advising that an Event of Default (as defined in the applicable MSLA) has occurred and is continuing beyond any applicable grace period; (f) whenever Bank, in its sole discretion, elects to terminate such Loan other than a Term Loan; or (g) termination hereof. (iii) Lender acknowledges that: (1) termination hereof may result in the termination of certain Authorized Investments prior to their maturity which, in turn, may result in losses being realized in such Authorized Investments; and (2) any such losses shall be for the account and sole risk of Lender.

(i) Sale of a Security on Loan. Lender shall advise Bank of the sale of Securities no later than 9:00 a.m. on the Business Day after the sale date (which notice need not be limited to Securities on Loan, but must include such Securities). Bank shall not be liable for any failures occurring on a settlement date for sale of Securities if timely notice is not given by Lender as provided in the preceding sentence, and shall not be liable in any event (except as provided in Section 7) for failure of a Borrower to return Securities on Loan in a timely fashion; provided that, if notice is given by Lender to Bank by the time set out in the preceding sentence and the Borrower does not return the Security on Loan within the settlement time frame applicable to the sale of such Security, Bank shall credit Lender for any related overdraft charges and reimburse Lender for those charges that may be incurred in connection with any resulting sale fail or, alternatively, Bank shall credit to the Account a security identical to the Security on Loan. In connection with the foregoing, Lender shall subrogate Bank to any rights Lender may have against the Borrower to the extent Bank makes any such payment or credit (where the credit or payment resulted in any expense to Bank). Lender shall receive contractual settlement date accounting (as described in Section 6(b) of the Custody Agreement) with respect to Securities that are on Loan to the same extent that Lender would be entitled to contractual settlement date accounting under the Custody Agreement for the sale of Securities that were not on Loan; it being understood and agreed, however, that in any given case Lender shall not be entitled to be credited with a security identical to a Security on Loan and to receive contractual settlement date accounting in respect of the sale of such Security.

(j) Recordkeeping and Reports. Bank shall establish and maintain such records as are reasonably necessary to account for Loans that are made and the income derived therefrom. Bank shall provide Lender and Adviser (acting in its capacity as an Authorized Person) with a monthly statement describing the Loans made during the preceding month and the income derived from Loans during the period covered by such statement. A party shall comply with reasonable requests of the other party for information necessary to the requester’s performance of its duties hereunder.

Section 6 - Default by Borrower

(i) Bank may assume (unless it has actual knowledge to the contrary) that any representations made by a Borrower in connection with any Loan are true, that no event which is or may become an Event of Default (as defined in the applicable MSLA) has occurred and that a Borrower has complied with its obligations under the applicable MSLA. Subject to Sections 5(f)(i)-(ii) and Sections 7(b)-(c) hereof, Bank shall have no responsibility for any breach of any obligation by any Borrower under or in connection with any MSLA or Loan. Bank shall have no responsibility for the accuracy or completeness of any information supplied by any Borrower. Bank shall not be liable as a result of taking or omitting to take any action, provided that Bank shall have carried out its responsibilities as lending agent hereunder in good faith. (ii) If any Borrower with respect to any Loan effected pursuant hereto and pursuant to the applicable MSLA fails to return any Securities on Loan when due thereunder for reasons other than relating to the solvency of the Borrower, Bank shall then, in addition to taking whatever action may be required by Section 7(c) hereof, take whatever action it deems appropriate in accordance with general market practice and Bank’s reasonable judgment, including, but not necessarily limited to, claiming compensation from such Borrower on behalf of Lender in the event a trade executed by Lender fails on account of such Borrower’s failure timely to have returned Securities on Loan or, where Bank deems it necessary, such other action as may be permitted by the applicable MSLA. (iii) If any Borrower with respect to any Loan effected pursuant hereto and pursuant to the applicable MSLA fails to return any Securities on Loan when due thereunder for reasons relating to the solvency of the Borrower, Bank shall then, in addition to taking whatever action may be required by Section 7(c) hereof, take such action as its deems appropriate in accordance with Bank’s reasonable judgment under the applicable MSLA.

Section 7 - Liabilities. Indemnification

(a) Liabilities. Except as provided in Sections 5(f)(i)-(ii) and Sections 7(b)-(c) hereof, Bank shall not be liable for any costs, expenses, damages, liabilities or claims (including attorneys’ and accountants’ fees) incurred by Lender, except those costs, expenses, damages, liabilities and claims arising out of the negligence, bad faith or willful misconduct of Bank. Bank shall have no obligation hereunder for: (i) costs, expenses, damages, liabilities or claims (including attorneys’ and accountants’ fees), which are sustained or incurred by Lender by reason of any action or inaction by any pricing service, any Depository or a Triparty Institution or their respective successors or nominees; and (ii) any failure to perform any obligation due to any matters beyond the control of Bank. In no event shall Bank be liable for indirect or consequential damages or lost profits or loss of business, arising hereunder or in connection herewith, even if previously informed of the possibility of such damages and regardless of the form of action.

Except for any costs or expenses incurred by Bank in performing its obligations pursuant to Sections 5(f)(i)-(ii) and Sections 7(b)-(c) hereof and ordinary operating expenses incurred by Bank in providing services hereunder, Lender shall indemnify Bank and hold it harmless from and against any and all costs, expenses, damages, liabilities or claims, including reasonable fees and expenses of counsel, which Bank may sustain or incur or which may be asserted against Bank by reason of or as a result of any action taken or omitted by Bank in connection with operating hereunder or enforcing Lender’s rights under the applicable MSLA, other than those costs, expenses, damages, liabilities or claims arising out of the negligence, bad faith or willful misconduct of Bank. The foregoing indemnity shall be a continuing obligation of Lender, its successors and assigns, notwithstanding the termination of any Loans hereunder or of this Lending Agreement. Bank may

charge any amounts to which it is entitled hereunder against the Account, and Lender shall be entitled to an accounting of all amounts so charged. Actions taken or omitted in reliance upon Proper Instructions, or upon any information, order, indenture, stock certificate, power of attorney, assignment, affidavit or other instrument reasonably believed by Bank, in good faith, to be genuine or bearing the signature of a person or persons believed, in good faith, to be authorized to sign, countersign or execute the same, shall be conclusively presumed to have been taken or omitted in good faith.

(b) Indemnification of Lender in respect of Distributions. If the Borrower in respect of any Loan effected pursuant hereto and pursuant to the applicable MSLA fails to deliver any non-cash Distributions with respect to Securities on Loan as and when requested to do so by Bank as provided in Section 5(f)(ii)(c) hereof, Bank shall with respect to: (x) U.S. Securities at its option, credit such non-cash Distribution or an amount equivalent thereto to the Account on the date it is due, and (y) Non-U.S. Securities, for any non-cash Distributions made during the period of the relevant Loan (up to and including the date of any Event of Default) or for any non-cash Distributions for which the record date occurs on or before the date of any Event of Default, Bank shall, at its option, either (i) purchase for the Account replacement securities (of an equal amount of the same issue, class, type or series as the Distribution) on the principal market in which such securities are traded or (ii) credit the Account with the Market Value in Dollars of such Distributions on the due date as determined by Bank in good faith. The foregoing shall, subject to Sections 7(c)(iii) and 7(d) hereof, be at Bank’s expense.

(i) U.S. Securities. If the Borrower in respect of any Loan of U.S. Securities effected pursuant hereto and pursuant to the applicable MSLA fails to return any Securities on Loan to Bank for the Account when due thereunder, which is the date an Event of Default shall have occurred under the applicable MSLA (the “Return Date”), then Bank shall, at its expense, but subject to Sections 7(c)(iii) and 7(d) hereof, deposit replacement Securities of the same issue, type, class and series to the Account, as soon as practicable. If Bank is unable to obtain replacement Securities, Bank shall, at its expense, but subject to Sections 7(c)(iii) and 7(d) hereof, credit the Account in Dollars with the Market Value of such Securities on Loan on the credit date.

(ii) Non-U.S. Securities. If the Borrower in respect of any Loan of Non-U.S. Securities effected pursuant hereto and pursuant to the applicable MSLA fails to return any such Securities on Loan to Bank for the Account on the Return Date, Bank shall, at Bank’s sole election and at its expense, but subject to Sections 7(c)(iii) and 7(d) hereof and to Bank not being responsible to compensate Lender for any increase in the Market Value of such Non-U.S. Securities after the Return Date, as soon as practicable, either (x) deposit replacement Securities of the same issue, type, class and series to the Account as the Securities on Loan up to the Market Value of such Securities determined as of the Return Date or (y) credit the Account, in Dollars, with the Market Value of the Securities on Loan determined as of the Return Date.

(iii) In connection with Section 7(b) and Section (c)(i) and (ii) above, “Market Value” (or “Value” in the case of Borrowers subject to Appendix 5B) shall: (y) be determined by Bank in accordance with the applicable MSLA, including the computation of Dollar equivalents where Securities on Loan and/or Collateral (and Proceeds) are denominated in a currency other than Dollars; and (z) in the case of fixed income Securities, including any accrued but unpaid interest

thereon. If the Market Value of the Cash Collateral on a credit date or a Return Date is less than that which is required to purchase replacement securities (and non-cash Distributions) or to credit the Account with the Market Value in Dollars of the Securities on Loan (and non-cash Distributions) as a result of a decrease in the Market Value of Authorized Investments, Bank shall not be responsible for that decrease and shall deposit replacement securities or credit the Account, with the Market Value of such Securities on Loan only to an amount net of the decrease in Market Value of Authorized Investments.

(d) Subrogation. If Bank makes a payment or a purchase pursuant to Sections 5(f), 7(b) or 7(c) Bank shall, to the extent of such payment or purchase, be subrogated to, and Lender shall assign and be deemed to have assigned to Bank, all of its rights in, to and against the Borrower (and any guarantor thereof) in respect of such Loan, any Collateral pledged by the Borrower in respect of such Loan, and all proceeds of such Collateral. In the event that Lender receives or is credited with any payment, benefit or value from or on behalf of the Borrower in respect of rights to which Bank is subrogated as provided herein, Lender shall promptly remit or pay to Bank the same (or its Dollar equivalent).

Section 8 - Bank Compensation

The compensation payable to Bank hereunder shall be as set forth in the fee schedule annexed hereto as Appendix 6, as the same may be amended from time to time. Bank is authorized, on a monthly basis, to charge such fees (together with reasonable expenses incurred by Bank hereunder) and any other amounts owed by Lender hereunder against the Account and/or a Collateral Account.

Section 9 - Taxes

(a) Lender shall be responsible for all filings, tax returns and reports on any Loans undertaken by Bank on Lender’s behalf which are to be made to any authority whether governmental or otherwise and for the payment of all unpaid calls, taxes (including, without limitation, any value added tax), imposts, levies or duties due on any principal or interest, or any other liability or payment arising out of or in connection with any Securities or any Collateral, and insofar as Bank is under any obligation (whether of a governmental nature or otherwise) to pay the same on Lender’s behalf, Bank may do so out of any monies or assets held by it pursuant to the terms of the Custody Agreement or hereunder.

(b) Lender acknowledges that: (i) the tax treatment of the payments made by a Borrower to Lender in lieu of Distributions (including, by way of illustration and not of limitation, with respect to any dividends received deduction and amounts paid by the depositary on American Depositary Receipts and Global Depositary Receipts) may differ from the tax treatment of the Distribution to which such payments relate; and (ii) it has made its own determination as to the tax treatment of any Loan made pursuant hereto, of any in lieu of payments made by a Borrower and of any remuneration and any other amounts that may be received by it hereunder.

(c) The parties intend any Loan to qualify as a securities lending transaction subject to Section 1058 of the Internal Revenue Code of 1986, as amended, and, in that connection, Bank confirms that its documentation is designed to help assure that lending transactions so qualify. Each party shall refrain from taking any action that would reasonably be expected to cause any Loan to fail to so qualify.

Section 10 - Instructions

(a)(i) Written Instructions. “Written Instructions” shall mean written communications actually received by Bank from an Authorized Person or from a person reasonably believed by Bank to be an Authorized Person by letter, memorandum, telegram, cable, telex, telecopy facsimile, computer, video (CRT) terminal or other on-line system, or any other method reasonably acceptable to Bank and whereby Bank is able to verify with a reasonable degree of certainty the identity of the sender of such communications or which communications are transmitted with proper testing or authentication pursuant to terms and conditions which Bank may specify. (ii) Oral Instructions. “Oral Instructions” shall mean oral communications actually received by Bank from an Authorized Person or from a person reasonably believed by Bank to be an Authorized Person. Oral Instructions shall promptly thereafter be confirmed in writing by an Authorized Person (which confirmation may bear the facsimile signature of such Person), but Lender shall hold Bank harmless for the failure of an Authorized Person to send such confirmation in writing, the failure of such confirmation to conform to the Oral Instructions received, or Bank’s failure to produce such confirmation at any subsequent time. Lender shall be responsible for safeguarding any testkeys, identification codes or other security devices which Bank may make available to Lender or its Authorized Persons.

(b) Unless otherwise expressly provided, all Proper Instructions shall continue in full force and effect until canceled or superseded.

Section 11 - Pricing Services

Bank may use any pricing service referred to in an applicable MSLA and any other recognized pricing service (including itself and any of its Affiliates) in order to perform its valuation responsibilities with respect to Securities, Collateral and Authorized Investments, and Lender shall hold Bank harmless from and against any loss or damage suffered or incurred as a result of errors or omissions of any such pricing service. If Lender or Adviser (acting in its capacity as an Authorized Person) advises Bank that there is a material discrepancy between the price assigned to a Security in the calculation of a Lender’s net asset value by Lender and the price assigned by Bank in connection with the indemnity contained in Section 7(c) where Bank credits the Market Value of a Security to Lender, the parties shall negotiate in good faith on the price to apply.

Section 12 - Termination

This Lending Agreement may be terminated at any time by any party upon delivery to the other party of notice specifying the date of such termination, which shall be not less than 30 days after the date of receipt of such notice. Notwithstanding any such notice, this Lending Agreement shall continue in full force and effect with respect to all Loans outstanding on the termination date, which Loans shall, however, be terminated as soon as reasonably practicable.

Section 13 - Miscellaneous

(a) Legal proceedings. Bank may refrain from bringing any legal action or proceeding arising out of or in connection with any Loan until it shall have received such security as it may require for all costs, expenses (including legal fees) and liabilities which it shall or may expend or incur in relation thereto.

(b) Integration. Lending Agreement to Govern. This Lending Agreement and the Custody Agreement contain the complete agreement of the parties with respect to the subject matter hereof and supersede and replace any previously made proposals, representations, warranties or agreements with respect thereto by the parties. In the event of any conflict between this Lending Agreement and the Custody Agreement, this Lending Agreement shall govern.

(c) Confidentiality of Portfolio Holdings and Other Information. Bank shall keep confidential, and will cause its employees to keep confidential, all non-public information concerning the Lender’s portfolio holdings and other confidential information (collectively, “Lender Confidential Information”) obtained hereunder from or on behalf of the Lender. Bank will use Lender Confidential Information only for the purposes of providing services under this Agreement and will disclose such Confidential Information only to the extent necessary to provide the services specified in this Agreement or as otherwise required by law. Lender shall keep confidential all confidential information provided to it by Bank under this Agreement (“Bank Confidential Information”), except to the extent that disclosure is required by applicable law or otherwise with the consent of Bank. Confidential Information of a disclosing party shall in no event include information which the receiving party (i) knew at the time of first disclosure to it; (ii) is or becomes generally known in the industry or public knowledge without default by the receiving party of its obligations hereunder; (iii) can demonstrate, from written records, has been independently developed through employees none of whom had access to Confidential Information; or (iv) is generally furnished to third parties by the disclosing party without confidentiality restriction. A receiving party may disclose the other party’s Confidential Information pursuant to regulatory duties or competent judicial order provided that such party provides to the other party prompt detailed notice of such duties or order to permit the other party to seek an appropriate protective order or otherwise intervene to protect its Confidential Information. Notwithstanding anything herein that may be to the contrary, a receiving party may disclose Confidential Information of the other party to its regulatory authority having supervisory jurisdiction over it pursuant to a request made during the course of a supervisory examination or otherwise.

(d) Notices. Unless expressly provided herein to the contrary, notices hereunder shall be in writing, and delivered by facsimile, telecopier, overnight express mail, first-class postage prepaid, delivered personally or by receipted courier service. All such notices which are mailed shall be deemed delivered upon receipt. Notices shall be addressed as follows (or to such other address as a party may from time to time designate on notice duly given in accordance with this Section): notices to Bank shall be addressed to it at, 4 New York Plaza, New York, New York, 10004, Attention: Global Securities Lending ; notices to be given to Lender shall be addressed to it at its offices at 522 Fifth Avenue. New York, New York 10036, Attention: Nina O. Shenker, Esq., with copies to Robert Kravantka, Christopher Walsh, Lydia Apping, and Garfield Johnson.

(d) Amendments. Waiver. This Lending Agreement may be modified only by a written amendment signed by both parties, and no waiver of any provision hereof shall be effective unless expressed in a writing signed by the party to be charged.

(e) Governing Law. Consent to Jurisdiction. Waiver of Immunity. THIS LENDING AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF. Bank and Lender each hereby consents to the jurisdiction of a state or federal court situated in New York City, New York in connection with any dispute arising hereunder and Lender hereby waives any claim of forum non conveniens to the extent that it may lawfully do so. To the extent that in any jurisdiction Lender may now or hereafter be entitled to claim, for itself or its assets, immunity from suit, execution, attachment (before or after judgment) or other legal process, Lender irrevocably shall not claim, and it hereby waives, such immunity.

(f) Counterparts. Headings. This Lending Agreement may be executed in several counterparts, each one of which shall constitute an original, and all collectively shall constitute but one instrument. The headings of the sections hereof are included for convenience of reference only and do not form part of this Lending Agreement.

(g) Severability. Any provisions hereof which may be determined by competent authority to be prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

(h) Identity of Adviser. If Lender is a registered investment company, the name of the investment adviser (and subadvisers, if any), to Lender is set forth on Exhibit A. Lender shall promptly notify Bank of any change in the identity of any of the foregoing.

(i) Multiple Lenders. This Lending Agreement shall, and shall be deemed to, create a separate agreement for each series or investment company (in the case of an investment company that does not consist of a separate series) listed on Exhibit A. For any Loan, each reference in this Lending Agreement to Lender shall be, and shall be deemed to be, a reference solely to the particular series or investment company to which that Loan relates. In no circumstances shall the rights, obligations or remedies with respect to a particular series or investment company, as the case may be, constitute a right, obligation or remedy with respect to any other series or investment company. Specifically, and without limiting the scope of the foregoing, Bank shall have no right to set off claims of, or amounts payable to, one series or investment company, as the case may be, by applying property of any other series or investment company.

IN WITNESS WHEREOF, the parties have executed this Lending Agreement as of the date first above-written.


JPMORGAN INSTITUTIONAL TRUST		JPMORGAN CHASE BANK, N.A.
(on behalf of each of the respective funds listed on Exhibit A to which the above entity relates)

By:	/s/ Robert L. Young	By:	/s/ Steven E. Cutler
Name:	Robert L. Young	Name:	Steven E. Cutler
Title:	Senior Vice President	Title:	Senior Vice President
Date:	September 26, 2005	Date:	September 26, 2005

Exhibit A

Participating Funds

JPMorgan Institutional Trust

JPMorgan Core Bond Trust

JPMorgan Intermediate Bond Trust

JPMorgan Short-Term Bond Trust

JPMorgan Equity Index Trust

Advisor: J.P. Morgan Investment Management Inc.

Appendix 1

JPMorgan Chase Bank, N.A.

Securities Lending Investment Guidelines

Separate Account for each of the Following Funds

JPMorgan Core Bond Trust

JPMorgan Intermediate Bond Trust

JPMorgan Short Term Bond Trust

A. OBJECTIVE

To obtain an attractive yield on securities lending cash collateral by investing in short term, fixed income securities (and other securities with debt-like characteristics) that satisfy these guidelines, as applied at the time of purchase, with the aim to be fully invested as of the close of business on each day.

B. PERMISSIBLE INVESTMENTS

1. Instruments

Both fixed-income securities and other securities with debt-like characteristics on a fixed rate and floating rate basis are permitted, as set forth below:

Asset-backed securities

Bank Notes

Bankers’ Acceptances

Certificates of Deposit

Commercial Paper

Corporate Bonds

Deposit Notes

Investment Agreements, Funding Agreements, or GICs entered into, with, or guaranteed by an insurance company

Loan Participations

Master Notes

Medium Term Notes

Overnight Repurchase Agreements, subject to the requirements of paragraph F

Time Deposits

U.S. Government Securities, which shall include securities issued or guaranteed as to principal and interest by the United

States Government, its agencies, instrumentalities or establishments

2. Commingled Vehicles

In addition, for purposes of these guidelines, shares of a money market mutual fund registered with the Securities and Exchange Commission as an investment company under the Investment Company Act of 1940, as amended, shall be: (i) permissible investments, (ii) deemed to have a “Final Maturity” of one day for purposes of the Maturity Guidelines in paragraph E, and (iii) not subject to the Quality Guidelines in paragraph G. If the money market mutual fund is advised by an affiliate of JPMorgan Chase & Co., such purchase may be made only in accordance with, and to the extent permitted by, the purchasing fund’s registration statement and an exemptive order issued by the SEC.

3. Currency

Shall be limited to the same currency in which the loan collateral is denominated.

4. Non-U.S. Issuers

Provided that an issuer otherwise meets the criteria set forth in these guidelines, there is no geographic limitation.

C. PROHIBITED INVESTMENTS

1. Equity Securities

Equity securities are prohibited.

2. Certain Derivatives

No investment shall be made in any instrument whose coupon rate moves in the opposite direction of the index to which such instrument is tied. In addition, in the event that investments are made in instruments whose coupon rate moves when the index to which such rate is tied moves, such investments shall only be in those of such instruments whose movements in the coupon rate are equivalent to movements in the index.

3. Floating Rate Securities

Floating rate securities with an interest rate cap, with the exception of those capped to comply with state usury laws.

D. CONCENTRATION GUIDELINES

(i)

Not more than 5% of the total assets available for investment on behalf of the Lender, measured at the time of purchase, may be invested in the securities of a single issuer other than U.S. Government Securities and repurchase agreements that are collateralized fully, as to which there is no limitation.

(i)

With respect to these limits, par values will be used to measure conformity to limits express in dollars, while purchase prices will be used for limits expressed in percentages.

E. MATURITY GUIDELINES

Fixed rate instruments: shall have a Final Maturity at the time of purchase that does not exceed 12 months.

Floating rate instruments: All floating rate instruments shall have a Final Maturity that does not exceed 3 years.

“Final Maturity” for purposes of these guidelines means the earliest of: (I) the date noted on the face of the instrument as the date on which the principal amount must be paid or (ii) in the case of an instrument with an unconditional put or unconditional demand feature, the date on which the principal amount of the instrument can be recovered by demand. With respect to asset-backed securities, the expected final maturity shall be deemed to be the Final Maturity.

A repurchase agreement shall be deemed to have a maturity equal to the period remaining until the date on which the repurchase of the underlying securities is scheduled to occur or, where no date is specified but the agreement is subject to a demand, the notice period applicable to a demand for the repurchase of the securities. Only overnight repurchase agreements are permitted as cash collateral investments.

The maximum weighted average maturity of all investments, excluding investments matched to term loans, on behalf of Lender shall not exceed 90 days at the time of purchase.

For purposes of calculating weighted average maturity in E. 5 above, a floating rate instrument shall be deemed to have a maturity equal to the period remaining until the next readjustment of the interest rate.

F. OVERNIGHT REPURCHASE AGREEMENTS

All Repurchase Agreements must comply with the Funds’ Repurchase Guidelines attached hereto including the requirements applicable to collateralization and repurchase agreement counterparties.

1. Permitted Collateral

•

Asset-backed securities

•

Bills, bonds or notes issued by the United States Treasury, as well as other securities guaranteed as to principal and interest by the Government of the United States, its agencies, instrumentalities or establishments

•

Collateralized Mortgage Obligations

•

Corporate obligations

•

Mortgage-backed securities, including private label issuers

•

Money market instruments (including, but not limited to, certificates of deposit, bank notes, deposit notes, bankers’ acceptances and commercial paper)

G. QUALITY GUIDELINES

1. Ratings

a. Except with respect to permitted collateral for repurchase agreements (F.1.) and as noted below, a permissible investment must have a minimum short-term rating as provided by a Nationally Recognized Statistical Rating Organization (“NRSRO”) as follows:

Any one of the following: A-1 by Standard & Poors (“S&P”), P-1 by Moody’s Investor Services (“Moody’s”), F-1 by Fitch (or an equivalent rating by another NRSRO).

A security without its own rating shall be considered to be rated if the issuer of the security is rated with respect to: (i) a class of short-term debt obligations, in the case of short-term ratings, or (ii) a class of long-term debt obligations, in the case of long-term ratings, or (iii) any security of the issuer within a class the same as the unrated security that is comparable in priority of payment to the unrated security to be purchased.

Long-term ratings shall be used only if a security is not rated and no security of the same issuer that is comparable in priority with such security is rated. Where a long-term rating is used, the issuer must have a minimum long-term rating as follows:

Any one of the following: A- by S&P, A3 by Moody’s, A- by Fitch or equivalent rating by another NRSRO

b. Permitted collateral for repurchase agreements (see F.1.) must have a rating from at least two NRSROs in the case of money market instruments and BBB/Baa or the equivalent for corporate obligations, except equities need not be rated.

2. Downgrades

Securities may not be purchased based on an S&P, Moody’s, Fitch or another NRSRO’s rating where the applicable NRSRO has announced publicly that it is examining the relevant rating for a possible downgrade. The foregoing limitation shall not apply to securities rated A-1+ by S&P.

In the event that a security held falls below the minimum guideline as detailed in this paragraph G as a result of being downgraded by an NRSRO, JPMorgan shall notify the Lender and await instructions as to whether the affected security should be sold. In the absence of a contrary instruction, JPMorgan shall take no action in respect of the affected security. In no event shall JPMorgan be liable for any consequences of a rating downgrade, including, but not limited to, retention of the affected security in the absence of a sale instruction from Lender. Lender acknowledges that any loss from a sale shall be for its account.

H. Extension Trades

From time to time a particular holding may be sold and a different issue purchased in its stead (an “extension trade”). An extension trade allows the seller to realize a gain on the issue being sold, while reinvesting the proceeds (ex the gain) into other paper.

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Each Lender should regularly analyze these guidelines to determine their continued appropriateness, recognizing that all investments bear risk and that return of principal is not assured. Please indicate your acceptance of these guidelines by signing in the space provided below.

JPMorgan Institutional Trust on behalf of its series listed above:


By:		/s/ Robert L. Young
Name:		Robert L. Young
Title:		Senior Vice President
Date:		September 26, 2005

Appendix 1

JPMorgan Chase Bank

Securities Lending Investment Guidelines

Separate Account for each of the following Funds

JPMorgan Equity Index Trust

A. OBJECTIVE

B. PERMISSIBLE INVESTMENTS

1. Instruments

Both fixed-income securities and other securities with debt-like characteristics on a fixed rate and floating rate basis are permitted, as set forth below:

Bank Notes

Bankers’ Acceptances

Certificates of Deposit

Commercial Paper, including unregistered Commercial Paper

Deposit Notes

Master Notes

Medium Term Notes

Overnight Repurchase Agreements, subject to the requirements of paragraph F

Time Deposits

U.S. Government Securities, which shall include securities issued or guaranteed as to principal and interest by the United

States Government, its agencies, instrumentalities or establishments

2. Commingled Vehicles

3. Currency

Shall be limited to the same currency in which the loan collateral is denominated.

4. Non-U.S. Issuers

Provided that an issuer otherwise meets the criteria set forth in these guidelines, there is no geographic limitation.

C. PROHIBITED INVESTMENTS

1. Equity Securities

Equity securities are generally prohibited, except that equity securities that (i) have predominantly debt characteristics (such as owner trust certificates) or (ii) are permitted under F.1 below, are not prohibited.

2. Certain Derivatives

3. Floating Rate Securities

Floating rate securities with an interest rate cap, with the exception of those capped to comply with state usury laws.

D. CONCENTRATION GUIDELINES

With respect to these limits, par values will be used to measure conformity to limits express in dollars, while purchase prices will be used for limits expressed in percentages.

E. MATURITY GUIDELINES

Fixed rate instruments: shall have a Final Maturity at the time of purchase that does not exceed 12 months.

Floating rate instruments: All floating rate instruments shall have a Final Maturity that does not exceed 3 years.

“Final Maturity” for purposes of these guidelines means the earliest of: (i) the date noted on the face of the instrument as the date on which the principal amount must be paid or (ii) in the case of an instrument with an unconditional put or unconditional demand feature, the date on which the principal amount of the instrument can be recovered by demand. With respect to asset backed securities, the expected final maturity shall be deemed to be the Final Maturity.

The maximum weighted average maturity of all investments, excluding investments matched to term loans, on behalf of Lender shall not exceed 90 days at the time of purchase.

F. OVERNIGHT REPURCHASE AGREEMENTS

All Repurchase Agreements must comply with the Funds’ Repurchase Guidelines attached hereto including the requirements applicable to collateralization and repurchase agreement counterparties.

1. Permitted Collateral

•

Money market instruments (including, but not limited to, certificates of deposit, bank notes, deposit notes, bankers’ acceptances and commercial paper)

•

Publicly traded U.S. Dollar-denominated equities, together with equity-like securities (including, but not limited to, convertible debt, exchange traded funds, and ADRs)

G. QUALITY GUIDELINES

1. Ratings

(i) Except with respect to permitted collateral for repurchase agreements (F.1.) and as noted below, a permissible investment must have a minimum short-term rating as provided by a Nationally Recognized Statistical Rating Organization (“NRSRO”) as follows:

Any one of the following: A-1 by Standard & Poors (“S&P”), P-1 by Moody’s Investor Services (“Moody’s”), F-1 by Fitch (or an equivalent rating by another NRSRO).

Any one of the following: A- by S&P, A3 by Moody’s, A- by Fitch or equivalent rating by another NRSRO

(ii) Permitted collateral for repurchase agreements (see F.1.) must have a rating from at least two NRSROs in the case of money market instruments and BBB/Baa or the equivalent for corporate obligations.

2. Downgrades

H. Extension Trades

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JPMorgan Institutional Trust on behalf of its series listed above:


By:		/s/ Robert L. Young
Name:		Robert L. Young
Title:		Senior Vice President
Date:		September 26, 2005

Repurchase Agreement Guidelines

2.2.17.

Repurchase Agreement Guidelines

The Funds managed by the Investment Adviser may from time to time enter into repurchase agreement transactions in accordance with the Funds investment guidelines. The following guidelines and standards shall be reviewed and approved by the Fund’s Boards at least annually. The Investment Adviser follows the guidelines and standards set forth below in connection with arranging such repurchase agreement transactions for the Funds. Various departments are responsible for the implementation and oversight of these guidelines and standards. Specifically, the Investment Adviser’s Risk Management Department is responsible for counterparty risk procedures, the Custodian is responsible for the operating procedures and the Administrator, in conjunction with the Investment Adviser’s Compliance Department is responsible for oversight of these procedures. Defined Terms are defined pursuant to the Investment Company Act and are provided below.

Agreement Collaterized Fully. The Funds may engage only in repurchase agreement transactions that are “collateralized fully” as defined in Rule 5b-3 of the Investment Company Act, except that (1) the JP Morgan Liquid Assets Money Market and Prime Money Market Funds (“Liquid Assets Fund” and “Prime Money Market Fund”) and the JP Morgan Securities Lending Collateral Investment Fund (“Securities Lending Collateral Fund”) may engage in repurchase transactions that are not collateralized fully, so long as the conditions described in Section 2 below are met and (2) certain of the former One Group Equity Funds and One Group Fixed Income Funds may invest cash collateral from securities lending in repurchase agreements where the underlying securities are equity securities or non-governmental securities but only if such Funds would be permitted to invest in such securities directly and only so long as the conditions in Section 1(a), 1(b),1(c), and 2(a) are met.. “Collateralized fully” means that:

The value of the securities collateralizing the repurchase agreement (reduced by the transaction costs (including loss of interest) that the Fund could expect to incur if the seller defaults) is, and during the entire term of the repurchase agreement remains, at least equal to the Resale Price provided in the agreement. Currently, the Investment Adviser will only enter into the repurchase agreement transactions on behalf of the Funds, pursuant to this Section 1, if the value of the securities collateralizing the repurchase agreement is equal to 102% of the Resale Price provided in the agreement.

The Fund has perfected its security interest in the collateral;

The collateral is maintained in an account of the Fund with its custodian or a third party that qualifies as a custodian under the Investment Company Act. For the purposes of meeting subsections (b) and (c) hereof, the Fund or its custodian or subcustodian either has actual physical possession of the collateral or, in the case of a security registered on a book entry system, the book entry is maintained in the name of the Fund or its custodian or subcustodian on its behalf.

Upon an Event of Insolvency with respect to the seller, the repurchase agreement would qualify under a provision of applicable insolvency law providing an exclusion from any automatic stay of creditors’ rights against the seller.

Repurchase Agreement Guidelines

The collateral consists entirely of cash items, Government Securities or securities that, at the time the repurchase agreement is entered into, are rated in the highest category by the Requisite NRSROs or Unrated Securities that are of comparable quality to securities that are rated in the highest rating category by the Requisite NRSROs as determined by the Fund’s Trustees or their delegate. The specific types of securities currently accepted as collateral for the purposes of this Section 1 are listed on the Schedules to the repurchase agreements.

The Liquid Assets Fund, the Prime Money Market Fund, and the Securities Lending Collateral Fund may enter into the repurchase agreement transactions that are not collateralized fully as provided in Section (1) above so long as the following conditions are met:

The repurchase agreement must be collateralized. The value of the securities collateralizing the repurchase agreement must be equal to at least 103% of the Resale Price provided in the Agreement or 102% of the Resale Price if the collateral is money market instruments rated A-1/P-1.

The collateral consists entirely of money market instruments or corporate debt securities that, at the time the repurchase agreement transaction is entered into, are rated at least investment grade (A-1/P-1/P-2, and/or A-3/P-3 for money market securities and BBB/Baa or higher for corporate securities) by the requisite NRSROs.

Conditions (b), (c) and (d) of Section 1 above.

Immediately after the Liquid Assets Fund, Prime Money Market Fund or Securities Lending Collateral Investment Fund enters into a Section 2 repurchase agreement transaction, no more than 5% of the Fund’s Total Assets in aggregate can be invested in securities issued by the counterparty to the repurchase agreement transaction (including repurchase agreements) and the Fund may own no more that 5% of the counterparty’s outstanding equity securities and no more than 10% of the principal amount of the counterparty’s outstanding debt securities.

Credit Determination. The Investment Adviser will follow the practices described in this Section 3 to determine that the repurchase agreement transactions entered into by the Fund represent minimal credit risks. The Investment Adviser shall consider both the credit worthiness of the counterparty and the quality of the collateral received under the repurchase agreement in making its determination, with such considerations, as appropriate to the type of repurchase agreement being entered into. Examples of information that may, but need not in every case, be used to assess the creditworthiness of the counterparty, include annual audited financial statements, semi-annual financial statements, Focus reports, ratings, rating agency reports, external research, and financial

Repurchase Agreement Guidelines

news services. The Investment Adviser may also consider the counterparty’s reputation, ownership, management and the Investment Adviser’s past experience in dealing with the counterparty.

Eligible Counterparties

Counterparties will be banks (or bank holding companies) or subsidiaries of such banks (or bank holding companies), and non-bank broker-dealers listed on the Federal Reserve Bank of New York’s list of primary and other reporting dealers. Counterparties or their parents (if the counterparties are not rated) will at the time of the transaction be rated in the highest short-term rating category by two NRSROs. Counterparties must be approved by the Investment Adviser’s Risk Management Group.

The Investment Adviser will also establish maximum concentration limits for a single counterparty when it deems appropriate. Currently, except for the repurchase agreement transactions described in Section 2 and the “putable” repurchase agreements described in Section 8 c, the Investment Adviser limits each Fund’s exposure to a single counterparty to 22% of the Fund’s net assets at the time of purchase. Currently, the Investment Adviser will also limit each of the Treasury Plus Money Market and the US Government Money Market Funds’ exposure to a single counterparty in a “putable” repurchase agreement transaction pursuant to Section 8 c hereof to no more than 10% of a Fund’s net assets at the time of purchase.

Currently, the Investment Adviser will also limit each of the Liquid Assets Money Market, Prime Money Market and the Securities Lending Collateral Fund’s total exposure to repurchase agreement transactions pursuant to Section 2 hereof to no more than 25% of a Fund’s net assets at the time of purchase. Currently, the Adviser will also limit each of the Treasury plus Money Market and the U.S. Government Money Market Funds’ total exposure to “putable” repurchase agreement transactions pursuant to Section 8c hereof to no more than 25% of a Fund’s net assets at the time of purchase.

Monitoring Counterparties. In Connection with each repurchase agreement entered into by a Fund, the Fund’s Investment Adviser shall periodically monitor the financial condition of the counterparty to ensure that the transaction continues to present minimal credit risks.

Eligible Collateral. All collateral must meet the requirements set forth in Section (1) or (2) above, as appropriate. All collateral must be US dollar-denominated and margin must cover principal plus accrued interest. The collateral accepted by the Fund pursuant to Section (1) must also meet the Fund’s quality guidelines for permissible Fund investments. In connection with securities lending cash collateral investments for certain former One Group Equity Funds and One Group Fixed Income Funds, the collateral accepted by the Funds pursuant to Section (1) must also meet the applicable Fund’s investment guidelines as set forth in the securities lending agreement with the Fund. The

Repurchase Agreement Guidelines

collateral accepted by the Liquid Assets Fund, Prime Money Market Fund or the Securities Lending Collateral Fund pursuant to Section (2) must meet the quality standards set forth in Section (2).

Forms of Agreement. Each repurchase agreement transaction entered into by a Fund shall be subject to a signed written agreement utilizing the Bond Market Association standard form of repurchase agreement (and, in the case of a tri-party agreement, an agreement containing substantially similar terms for the underlying transaction, the form of which (including any modification to the standard PSA form) shall be reviewed and approved by the Investment Adviser’s Legal Department. Any tri-party agreements shall be with subcustodians approved by the Fund’s Boards.

Terms of Agreement.

Except in the case of a tri-party agreement, the maximum term of a repurchase agreement will be seven days.

In the case of a tri-party agreement, the maximum maturity will be ninety-five days, or as limited by the specific repurchase agreement. Except for the “putable” repurchase agreements described in the following paragraph, a repurchase agreement with a term in excess of seven days will be treated as an illiquid investment for the purposes of the Fund’s investment limitations. Except for the putable repurchase agreements described in the following paragraph the Funds currently only enter into repurchase agreements that mature on the next business day.

Putable repurchase agreements. The JP Morgan Treasury Plus Fund and the JP Morgan U.S. Government Fund each may enter into tri-party repurchase agreements with a maximum maturity of ninety-five days if the agreement gives the Fund the right to put the repurchase agreement back to the counterparty at par at not more that seven calendar days’ notice.

Delivery of Collateral. Repurchase agreement collateral must be delivered and held at the Custodian, or at the Custodian’s or Fund’s account in an acceptable sub-custodian bank, with an appropriate subcustodial agreement in place or is segregated on behalf of the Fund in the Federal Reserve Book Entry System.

10.

Disposition of Collateral. If an instrument serving as collateral for a repurchase agreement becomes part of a Fund’s assets, and has a maturity in excess of 397 calendar days or does not meet the Fund’s guidelines for permissible investments, the Investment Adviser shall dispose of the instrument as soon as practicable, if the Fund is subject to Rule 2a-7 under the Investment Company Act.

11.

Review of Counterparties. The Investment Adviser shall maintain an “approved list” of banks and non-bank dealers with whom the Fund may engage in repurchase agreement transactions.

Repurchase Agreement Guidelines

12.

Definitions:

Investment Company Act. Section 2(a)(16). “Government Security means any security issued or guaranteed as to principal or interest by the United States, or by a person controlled or supervised by and acting as an instrumentality of the Government of the United States pursuant to authority granted by the Congress of the United States; or any certificate of deposit for any of the foregoing.

Investment Company Act Rules. Rule 5b-3(c).

Event of Insolvency means, with respect to a person:

Ad admission of insolvency, the application by the person for the appointment of a trustee, receiver, rehabilitator, or similar officer for all or substantially all of its assets, a general assignment for the benefit of creditors, the filing by the person of a voluntary petition in bankruptcy or application for reorganization or an arrangement with creditors; or

The institution of similar proceedings by another person which proceedings are not contested by the person; or

The institution of similar proceedings by a government agency responsible for regulating the activities of the person, whether or not contested by the person.

ii.

Government Security means any “Government Security” as defined in Section 2(a)(16) of the Investment Company Act.

iii.

NRSRO means any nationally recognized statistical rating organization, as that term is used in paragraphs (c)(2)(vi)(E), (F) and (H) of the Exchange Act Rule 15c3-1, that is not an “affiliated person,” as defined in Section 2(a)(3)(C) of Investment Company Act, of the issuer of, or any insurer or provider or credit support for, the security.

iv.

Requisite NRSROs means:

Any two NRSROs that have issued a rating with respect to a security or class of debt obligations of an issuer.

Resale Price means the acquisition price paid to the seller of the securities plus the accrued resale premium on such acquisition price. The accrued resale premium is the amount specified in the repurchase agreement or the daily amortization of the difference between the acquisition price and the resale price specified in the repurchase agreement.

vi.

Unrated securities are securities that have not received a rating from the requisite NRSROs.

Appendix 2

JPMorgan Chase Bank, N.A.

Securities Lending

Approved Borrowers

Borrowers located in the U.S.

•

ABN AMRO Inc.

•

ABN AMRO Bank N.V., New York Branch

•

Abbey National Securities Inc.

•

Banc of America Securities LLC

•

Barclays Capital, Inc.

•

Bear Stearns & Co., Inc.

•

Bear Stearns Securities Corp

•

BNP Paribas Securities Corp.

•

Cantor, Fitzgerald & Co.

•

Cantor, Fitzgerald Securities

•

Charles Schwab & Co Inc.

•

CIBC World Markets Corp.

•

Citigroup Global Markets Inc.

•

Commerzbank Capital Markets Corporation

•

Countrywide Securities Corporation

•

Credit Suisse First Boston LLC

•

Daiwa Securities America Inc.

•

Deutsche Bank Securities Inc.

•

Dresdner Kleinwort Wasserstein Securities LLC

•

Fimat USA, LLC

•

First Clearing, LLC

•

First Horizon National Corporation

•

Fortis Securities, LLC

•

G.X. Clarke & Co.

•

Garban Corporates, LLC

•

Garban LLC

•

Goldman, Sachs & Co.

•

Greenwich Capital Markets, Inc.

•

Harris Nesbitt Corp.

•

HSBC Securities,(USA) Inc.

•

ING Financial Markets LLC

•

Janney Montgomery Scott LLC

•

Jefferies & Company, Inc.

•

Lazard Capital Markets

•

Legg Mason Wood Walker, Inc.

•

Lehman Brothers Inc

•

Man Securities Inc.

•

Merrill Lynch Government Securities Inc.

•

Merrill Lynch, Pierce, Fenner & Smith Inc.

•

Mizuho Securities USA, Inc.

•

Morgan Stanley & Co. Incorporated

•

Morgan Stanley Securities Services, Inc.

•

National Financial Services LLC

•

Nomura Securities International, Inc.

•

Pershing LLC

•

Raymond James & Associates, Inc.

•

RBC Dain Rauscher Incorporated

•

RBC Capital Markets Corporation

•

Refco Securities, LLC

•

Sanford C Bernstein & Co Inc.

•

SG Americas Securities, LLC

•

Societe Generale, New York Branch

•

Southwest Securities, Inc.

•

UBS Securities LLC

•

Wachovia Bank, National Association

•

Wachovia Capital Markets, LLC

•

Westdeutsche Landesbank Girozentrale (NY Branch)

•

Zions First National Bank

58 Domestic Brokers

Last updated: August 29, 2005

Appendix 3

Acceptable Collateral

Cash

Appendix 5A

MASTER SECURITIES LENDING AGREEMENT

This MASTER SECURITIES LENDING AGREEMENT dated as of 200 by and between (the “Borrower”) and JPMORGAN CHASE BANK, as trustee or managing agent for those certain trusts and accounts (including accounts subject to ERISA, as hereinafter defined) from time to time listed in Appendix A hereto (JPMorgan Chase Bank, acting in its capacity as trustee or managing agent for each such trust or account, and not in its individual capacity, is hereinafter referred to as the “Trustee”).

WITNESSETH THAT:

WHEREAS, the Borrower desires to borrow, from time to time, certain securities from the Accounts, as hereinafter defined, on the terms and conditions hereinafter set forth; and

WHEREAS, the Trustee is willing, subject to mutual agreement as to each loan in the manner hereinafter set forth, to lend such securities to the Borrower from time to time on behalf of the Accounts on the terms and conditions hereinafter set forth;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereto hereby agree as follows:

1. Definitions. As used in this Agreement the following words and terms shall have the meanings set forth below, unless the context clearly indicates otherwise:

a)	“Account” shall mean each trust or account from time to time listed in Appendix A hereto, as the same may be amended from time to time in accordance with paragraph 12 hereof.

“Approved Securities” shall mean book-entry securities issued by the U.S. Treasury (as defined in Subpart O of Treasury Department Circular No. 300 and any successor provisions) and any other securities issued or fully guaranteed by the United States government or any agency, instrumentality or establishment of the U.S. government, including, without limitation, securities commonly known as “Ginnie Maes”, “Sally Maes”, “Fannie Maes” and “Freddie Macs”, and any other securities as agreed to by the Borrower and the Trustee from time to time, which are acceptable to the Trustee in its sole discretion.

c)	“Business Day” shall mean any day on which banks and the NYSE are open for business in New York City.

“Collateral” shall mean, collectively, (a) all Pledged Cash from time to time held by the Trustee hereunder, any property in which such Pledged Cash may from time to time be invested or reinvested by the Trustee and held by it (but not the income or distributions thereon or gains therefrom), and any amounts or other proceeds arising in connection with the sale, exchange, collection or other disposition of any of the foregoing, (b) all Approved Securities from time to time delivered by the Borrower and held by the Trustee hereunder, the interest or other income therefrom and the proceeds thereof, and (c) all Letters of Credit from time to time held by the Trustee hereunder and the proceeds thereof, in each case regardless of whether the same has been allocated at any time or from time to time to any particular Loan.

e)	“Equivalent Securities” shall mean securities of an identical type, nominal value, description and number, of the same issuer and of the same class, as the Loaned Securities.

f)	“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

“Letter of Credit” shall mean an irrevocable performance letter of credit issued by a bank acceptable to the Trustee for the account of the Borrower or any other person acceptable to the Trustee, which letter of credit (a) expires not earlier than such time as shall be agreed between the Borrower and the Trustee, (b) names as beneficiary JPMorgan Chase Bank, as trustee or managing agent, (c) is payable to the beneficiary upon presentation of a draft in the amount of any drawing and a statement of the beneficiary that the amount being drawn thereunder represents money owed to the beneficiary in connection with a loan or loans of securities, (d) permits any number of partial drawings (which pro tanto reduce the amount available under the Letter of Credit), and (e) otherwise contains such terms and provisions as are required by or acceptable to the Trustee.

h)	“Loan” shall mean each securities loan made pursuant to paragraph 2 hereof.

i)	“Loaned Securities” shall mean all securities loaned to the Borrower hereunder or an equal principal amount of the same issue or series and any securities issued in exchange therefor.

“Market Value” shall mean, with respect to any security, as of any date of determination thereof, (a) the closing price of such security on the NYSE on the trading day next preceding such date of determination, or (b) if such security is not listed on the NYSE, the closing price of such security on any national securities exchange selected by the Trustee on which such security is listed on the trading day next preceding such date of determination, or (c) if such security is not listed on any national securities exchange, the asked price of such security as quoted by a recognized pricing service selected by the Trustee (including as evidenced by quotations available through Bloomberg’s Financial Service and any pricing service provided by JPMorgan Chase Bank, or any affiliate thereof), at or as nearly as practicable at the close of business on the last trading day during which such security was traded next preceding such date of determination, or (d) with respect to a marketable United States government obligation, the price of such security as quoted by a recognized pricing service selected by the Trustee (including as evidenced by quotations available through Bloomberg’s Financial Service and any pricing service provided by JPMorgan Chase Bank, or any affiliate thereof), or if the Trustee so chooses the dealer asked price quoted by a recognized dealer in such security (which may be JPMorgan Chase Bank or any affiliate thereof) at or as nearly as practicable at the close of business on the last Business Day preceding such date of determination; provided, that the market value of any security held as Collateral as to which the issuer of such security is in default or as to which any third party has asserted an interest shall be zero for purposes hereof. In addition, the term “Market Value”, shall mean, as of any date of determination thereof, (a) with respect to any Pledged Cash or Collateral in which such Pledged Cash is invested, the amount of such Pledged Cash originally paid to the Trustee, as reduced by any payments of such Pledged Cash to or for the account of the Borrower, and (b) with respect to any Letter of Credit, the undrawn balance thereof which the Trustee may at any such time prior to the expiration of such Letter of Credit, draw thereunder; provided, however, that the market value of any Letter of Credit as to which the issuing bank has defaulted in honoring any draft drawn thereunder or has indicated its intention not to honor any such draft or as to which any judicial or similar restraint on payments thereunder exists shall be zero for all purposes hereof.

k)	“NYSE” shall mean the New York Stock Exchange, Inc.

l)	“Pledged Cash” shall mean the aggregate amount of cash paid to the Trustee from time to time as Collateral with respect to any Loan, as reduced to reflect any amounts thereof paid to or for the account of the Borrower and any increases or decreases resulting from marking to market adjustments.

“Required Value” shall mean at any date, with respect to any Loan, an amount equal to at least 102% of the then current Market Value of the relevant Loaned Securities which are the subject of that Loan as of the close of trading on the preceding Business Day, except in the case of certain discounted securities at or approaching maturity, for which “Required Value” shall mean, with respect to any Loan, an amount equal to at least 100% of the par value of the relevant Loaned Securities.

n)	“SEC” shall mean the Securities and Exchange Commission.

2. Loans of Securities.

(a) The Loans. From time to time, upon the request of the Borrower, the Trustee may, in its sole discretion, lend securities to the Borrower from one or more of the Accounts. Each such Loan shall be made on the terms and subject to the conditions hereinafter set forth, except as may be otherwise expressly agreed in writing by the parties hereto at the time such Loan is made. The Borrower hereby unconditionally agrees that it will punctually return all Loaned Securities to the Trustee at the times when the Loan of such Loaned Securities is terminated hereunder or when such Loaned Securities are otherwise required to be returned to the Trustee in accordance with the terms hereof, and that it will punctually pay, or cause to be paid, when due, all other amounts at any time payable by it hereunder or in connection herewith.

(b) Obligations to be Separate. Each and every obligation, liability or undertaking of the Trustee or an Account with respect to any Loan (i) shall be solely an obligation, liability or undertaking of, and binding upon, the Account by which such Loan is made and the Trustee acting for such Account in its capacity as such and (ii) shall be payable solely from the available assets of such Account. No such obligation, liability or undertaking shall be binding upon or affect any other Account, the Trustee acting in any other capacity or JPMorgan Chase Bank in its individual capacity.

3. Method of Making the Loans.

(a) Delivery of Loaned Securities. Each Loan hereunder shall be made by the Trustee delivering to the Borrower the Loaned Securities that are the subject of such Loan against receipt by the Trustee of the Collateral required to secure such Loan. The Trustee may deliver Loaned Securities to the Borrower either by (i) delivering to the Borrower certificates representing the Loaned Securities, duly endorsed in blank or accompanied by duly executed stock or bond transfer powers, as the case may be, with signatures guaranteed by a bank or a member firm of the New York Stock Exchange, Inc., in which event the Trustee shall list the Loaned Securities on a schedule and receipt, which the Borrower shall execute and return when the Loaned Securities are received, or (ii) causing the Loaned Securities to be credited to the Borrower’s account or the Borrower’s agent’s account at the Depository Trust Company (or any other depository or clearing agency agreed by the Borrower and the Trustee), including the Federal Reserve/Treasury Book Entry System. The Borrower agrees that the completion of a delivery of Loaned Securities to it as provided in this paragraph 3 shall constitute its acceptance and receipt thereof and that each such acceptance and receipt shall be deemed to constitute, and shall constitute, a representation by the Borrower that as of the date of such acceptance and receipt (i) all representations and warranties by the Borrower herein are true and correct, as if made on and as of such date, (ii) no default hereunder has occurred and is continuing, and (iii) except as otherwise theretofore disclosed to the Trustee in writing, there has been no material adverse change in the financial condition or business of the Borrower since the date of the most recent financial statements of the Borrower provided to the Trustee in accordance with subparagraph 7(c) or 8(a) hereof.

(b) Delivery of Collateral. The Borrower hereby agrees that, as a condition precedent to the making of any Loan, or, in the Trustee’s sole discretion, simultaneously with the making of any Loan, it shall deliver to the Trustee Collateral consisting of (i) cash, (ii) Approved Securities, and/or (iii) Letters of Credit having an aggregate Market Value on the date of such Loan at least equal to the Required Value with respect to such Loan on such date. Collateral at any time delivered to the Trustee under this paragraph or paragraph 6 hereof shall be of such type or types listed above as are then acceptable to the Trustee in its sole discretion.

(c) Manner of Collateral Delivery. Unless otherwise agreed by the Trustee and the Borrower, the delivery of Pledged Cash shall be made by (i) the Borrower transferring funds by wire, (ii) the Borrower delivering to the Trustee a certified or bank check representing New York Clearing House funds, (iii) the

Borrower causing the Borrower’s account or the Borrower’s agent’s account at a depository to be debited and the Trustee’s account to be credited in a corresponding amount, (iv) if agreed to, at the time, by the parties hereto, causing the Borrower’s account at JPMorgan Chase Bank to be charged or (v) any combination of any of the foregoing. Delivery of Approved Securities shall be effected for purposes hereof by normal and customary delivery procedures satisfactory, at the time, to the Trustee. Such procedures shall include, but are not limited to, delivery through book entry transfer pursuant to the rules and procedures of the Depository Trust Company (or any other clearing agency registered by the SEC) or the Federal Reserve/Treasury Book Entry System, as the case may be. All such deliveries shall be deemed to have been effected for purposes hereof when final, irreversible, credit has been made to the account of the party entitled to the receipt of such credit under the rules of such clearing agency or book entry system.

(d) Delivery of Letters of Credit. The delivery of a Letter of Credit shall be effected for the purposes of this Agreement by (i) physical delivery of the original executed Letter of Credit or (ii) tested telex by the issuing, confirming or advising bank to the Trustee. Unless the Trustee otherwise agrees to same day delivery of a Letter of Credit, no such delivery shall be effective until one Business Day after the receipt of a Letter of Credit by the Trustee, during which period the Trustee may reject such Letter of Credit, by oral notice to the Borrower, if such Letter of Credit is not in the form approved by the Trustee.

4. The Collateral.

(a) Pledge. As security for the prompt payment and performance of any and all obligations of the Borrower at any time or from time to time existing hereunder, or in connection with any Loan, the Borrower hereby pledges to the Trustee, and grants to the Trustee a security interest in, all Collateral (other than Letters of Credit) whether now owned or hereafter acquired, and whenever delivered to the Trustee (except insofar as greater rights are provided in subparagraph 4(b) hereof) and agrees that such pledge and grant of a security interest shall be effective immediately as to any Collateral upon delivery thereof to the Trustee. The Borrower hereby agrees that the Trustee shall have all right, title and interest in and to the Letters of Credit delivered as Collateral hereunder. The Trustee shall not be obligated to release Collateral, or take any other action with respect thereto, except as expressly provided herein.

(b) Pledged Cash. The Trustee shall have the unrestricted right to use and invest Collateral consisting of Pledged Cash, and any Collateral in which Pledged Cash is invested and reinvested, as it may elect, for the sole account of the Accounts. So long as appropriate records allocating such Pledged Cash or other Collateral are maintained, the Trustee may commingle such Pledged Cash or other Collateral with any other Collateral or other funds or assets, including funds or assets held by JPMorgan Chase Bank acting in any capacity as collateral agent under other lending agreements, and may hold the same in its own name or the name of its nominee. The Trustee shall be entitled to collect and retain, for the account of the affected Account or Accounts, any income on such Collateral and any net gains realized upon the sale, maturity, payment, retirement or other disposition of such investments or reinvestments. The Accounts shall bear the risk of all losses in value of the principal amount of any Collateral in which Pledged Cash is invested or reinvested. The sole obligation of the Trustee with respect to Pledged Cash is to repay such Pledged Cash to the Borrower as required by paragraphs 6, 9, and 10 hereof.

(c) Approved Securities. The Trustee may commingle any Approved Securities held by it with other Collateral or other assets, including assets held by JPMorgan Chase Bank acting in any capacity as collateral agent under other lending agreements, and may hold the same in its own name or the name of its nominee. Unless a default by the Borrower hereunder shall have occurred and be continuing, the Borrower shall be entitled to receive all interest payments or other distributions on Approved Securities held as Collateral that are received by the Trustee (if any). The parties hereto shall deliver such suitable assignments, orders and other instruments as may be required in order to effectuate the provisions of the preceding sentence. If any interest or other distribution on any Approved Securities is paid to the Borrower or to the Trustee in respect of a time when the recipient thereof is not entitled to receive such distribution, such recipient shall forthwith pay or deliver such distribution, or the equivalent thereof, to the party entitled to receive the same. The Borrower shall bear the risk of all losses in value of the principal amount of Approved Securities held as

Collateral. The sole obligation of the Trustee with respect to Approved Securities held as Collateral, except as provided in this paragraph, is to deliver such Approved Securities to the Borrower as required by paragraphs 6, 9 and 10 hereof.

(d) Substitutions of Approved Securities. Prior to the maturity of any Approved Securities, the Borrower may substitute other securities for the Approved Securities if (i) such substituted securities, together with all Collateral then held by the Trustee for such Loan, shall equal no less than the Required Value for such Loan, and (ii) such substituted securities Collateral is reasonably acceptable to the Trustee and the Account. In addition, the Trustee shall have the right to request that other securities be substituted by the Borrower for the Approved Securities if for any reason the Approved Securities are not at any time reasonably acceptable to the Trustee or the Account.

5. Rights of Borrower and Trustee with Respect to Loaned Securities.

(a) Borrower’s Rights. Until a Loan is terminated in accordance with the provisions hereof, the Borrower shall have all the incidents of ownership of the relevant Loaned Securities, including, without limitation, the right to transfer such Loaned Securities or any part thereof to others, free and clear of any right, title or interest of the Trustee, and to vote or otherwise consent as holder thereof, subject, however, to all rights of the Trustee and all obligations of the Borrower hereunder, including the provisions of subparagraph 5(b) hereof.

(b) Trustee’s Rights. The Trustee shall be entitled to receive all interest, dividends and other distributions of any kind whatsoever on or with respect to the Loaned Securities made during the period of the relevant Loan or for which the record date occurs during the period of the relevant Loan. Upon the payment or distribution of any of the foregoing to any person other than the Trustee, the Borrower shall, on the due date for payment or distribution thereof, pay and deliver the same or identical property (with any such endorsements or assignments as shall be customary and appropriate to effect the delivery) to the Trustee, for the account of the relevant Account, irrespective of whether the Borrower received the same; provided, however, that (i) any distribution of securities made in exchange for Loaned Securities shall be considered as substituted for such Loaned Securities and need not be delivered to the Trustee until the relevant Loan is terminated hereunder, (ii) any dividend payable solely in shares of stock which is distributed with respect to any Loaned Securities shall become a new Loan (and shall constitute Loaned Securities, on the same terms as the Loaned Securities in respect of which they were distributed, for all purposes hereof) and need not be delivered to the Trustee until such new Loan is terminated hereunder, if at or before the delivery of such dividend the Borrower shall have delivered such additional Collateral for such new Loan to the Trustee as shall be necessary to make the aggregate Market Value of the Collateral for such Loan, determined on the date of such distribution, at least equal to the Required Value with respect to such Loan determined on such date, and (iii) any distribution of warrants or rights to purchase shares made with respect to any Loaned Securities shall be deemed to be, and shall be, a new Loan made to the Borrower from the Account which loaned the Borrower the Loaned Securities with respect to which such distribution is made (and shall be treated as Loaned Securities, and as a separate Loan, for all purposes hereof) and need not be delivered to the Trustee until such new Loan is terminated in accordance herewith, if at or before the delivery of such distribution the Borrower and the Trustee shall have agreed upon the Required Value for such new Loan and the Borrower shall have delivered to the Trustee Collateral for such new Loan having a Market Value acceptable to the Trustee.

6. Allocation and Adjustment of Collateral.

(a) Allocation of Collateral. Except as provided in the following sentence, upon receipt of Collateral for a Loan, such Collateral shall be allocated to such Loan; provided that, if Collateral is received on the same day for more than one Loan, the Trustee shall allocate such Collateral to each Loan then being made so that each such Loan is secured by not less than the Required Value of Collateral as specified herein. Any Collateral received by the Trustee with respect to a Loan in excess of the Required Value for such Loan may be held by the Trustee as collateral security for all Loans made to the Borrower at any time without being

allocated to any one Loan or, in the sole discretion of the Trustee, may be allocated at any time to any Loan or Loans then outstanding hereunder. All allocations of Collateral shall be marked in the Trustee’s books, which shall be conclusive evidence of such allocations.

(b) Marking to Market. If at any time the aggregate Market Value of the Collateral allocated to any Loan exceeds the Required Value for such Loan, then the Trustee shall, upon oral demand, redeliver to the Borrower Collateral having an aggregate Market Value equal to such excess by the close of business on such Business Day or as otherwise agreed. If at any time the aggregate Market Value of the Collateral allocated to any Loan is less than the Required Value for such Loan, then the Borrower shall, upon oral demand by the Trustee, deliver to the Trustee additional Collateral having a Market Value at least equal to such deficiency. The Borrower unconditionally agrees to deliver such additional Collateral to the Trustee in the manner specified herein before the close of business on the date of such demand or as otherwise agreed.

(c) Reallocation of Collateral. The Trustee shall have the right, at its sole election, at any time and from time to time, to allocate and/or reallocate any Collateral held by it hereunder to or among any outstanding Loan or Loans.

(d) Partial Returns of Collateral. If, at the time, less than all of the Collateral held by the Trustee which has been allocated to any Loan or which is unallocated is required to be returned by the Trustee to the Borrower, the selection of the portion of such Collateral to be returned shall be solely at the election of the Trustee. If at any time the Trustee is required, or desires, to return a portion of any Approved Security to the Borrower pursuant to this Agreement, the Borrower shall, at the oral request of the Trustee, take all such action as is necessary to cause such Approved Security to be reissued in such denominations as are required to permit such a partial return and in such case the Trustee shall not be obligated to return Collateral hereunder unless and until such action has been taken and may thereafter make required returns of Collateral hereunder by returning Approved Securities in such amounts as are, as nearly as practicable, equal to but not greater than the required return. The return to the Borrower of Approved Securities the Market Value of which on the day on which the requirement to return the same was established was then sufficient to comply with such requirement of return shall be in full compliance with this Agreement and a full discharge of the Trustee’s obligation to make such return, notwithstanding the fact that at the date of such return the Market Value of any such Approved Securities may have declined. Whenever a Letter of Credit is to be returned in part, such return shall be effected by the Trustee’s consent to a reduction equivalent to such part in the amount available for drawings under such Letter of Credit.

7. Representations and Warranties of Borrower. The Borrower hereby represents and warrants to the Trustee that:

(a) Due Authorization, etc. The making and performance by the Borrower of this Agreement and the transactions contemplated hereby have been duly authorized by the Borrower; the Borrower has the requisite power and authority to make and perform the same; and such making and performance will not violate any applicable provision of law or regulation or result in the breach of or constitute a default or result in the creation of any lien or encumbrance under any agreement or other instrument to which the Borrower is a party or by which the Borrower or its property may be bound or affected. This Agreement constitutes a legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms. At any time that any Collateral is delivered to the Trustee hereunder the Borrower shall have the absolute right to transfer title to, and dispose of, such Collateral to the Trustee, and the Trustee shall at all times have a perfected security interest in all such Collateral, except that in the case of Letters of Credit the Trustee shall have all right, title and interest therein, in each case subject to no equal, prior or other liens, charges, encumbrances or other claims of any kind (except, in the case of Approved Securities, those in favor of JPMorgan Chase Bank or the Federal Reserve Bank).

(b) Borrower’s Status. The Borrower is either a bank or a broker- dealer registered under the Securities Exchange Act of 1934, as amended. Neither the Borrower nor any affiliate (as defined in Department of Labor Prohibited Transaction Exemption 81-6) of the Borrower has discretionary authority or control with

respect to investment of any plan assets held in any Account to which this Agreement is applicable or renders investment advice (within the meaning of 29 CFR 2510.3-21(c)) with respect to such assets, and the Borrower will promptly notify the Trustee of any change which would make the foregoing representation untrue. In connection with the foregoing, Trustee acknowledges that such representation and warranty shall not take effect until the Borrower has been furnished with a list of Accounts and has been given a reasonable opportunity to review the same (but in no event greater than 10 Business Days from the date such list is furnished to the Borrower). The Borrower shall advise the Trustee as soon as possible, but in no event later than the expiration of the 10 Day period referred to in the preceding sentence of the identity of any Account(s) as to which Borrower cannot make the representation and warranty referred to in this subsection (b), in which event any such Account(s) shall be deleted from the list of Accounts eligible to lend to the Borrower. If the Borrower does not so notify the Trustee, such Account(s) shall be deemed acceptable and such representation and warranty shall be considered to be in effect.

(c) Financial statements. The Borrower has heretofore delivered to the Trustee a copy of the most recent annual consolidated financial statements of the Borrower and its consolidated subsidiaries, duly audited by independent certified public accountants, including a balance sheet as at the end of the fiscal year, and a copy of the most recent unaudited consolidated financial statements of the Borrower and its consolidated subsidiaries, including a balance sheet as at the end of the period covered thereby, and each of said statements and the related notes thereto are complete and correct and fairly present the consolidated financial condition and results of operations of the Borrower and its consolidated subsidiaries, all in conformity with generally accepted accounting principles consistently applied.

7A. Representations and Warranties of Trustee on Behalf of Each Account. The Trustee represents and warrants that each Account has represented and warranted to the Trustee that it: (i) has authorized Trustee to execute and deliver an agreement substantially in the form hereof, to enter into the transactions contemplated hereby, and to perform Trustee’s obligations hereunder; (ii) is the beneficial owner of all securities lent by it hereunder or otherwise has the right to lend such securities; and (iii) is entitled to receive all interest, dividends and other distributions made by the issuer with respect to such securities.

8. Covenants of Borrower. The Borrower hereby covenants and agrees with the Trustee as follows:

(a) Delivery of Financial Statements, etc. The Borrower will furnish to the Trustee, (i) as soon as available, a copy of the annual consolidated financial statements of the Borrower and its consolidated subsidiaries duly audited by independent certified public accountants, including a balance sheet as at the end of such fiscal year, prepared in accordance with generally accepted accounting principles consistently applied, (ii) as soon as available for each quarter, a copy of the consolidated financial statements of the Borrower and its consolidated subsidiaries for the period then ended, including a balance sheet as at the end of such period, prepared in accordance with generally accepted accounting principles on a basis consistent with that used in the preparation of the financial statements referred to in clause (i) above and certified by an appropriate officer of the Borrower, (iii) promptly after the filing thereof, a copy of each report or other instrument filed by the Borrower with the SEC, (iv) promptly after the occurrence of any default under this Agreement, a written notice setting forth the nature of such default and the steps being taken by the Borrower to remedy such default, and (v) from time to time such further information (whether or not of the kind mentioned above) regarding the business, affairs and financial condition of the Borrower as the Trustee may reasonably request.

(b) Notice of Certain Actions. The Borrower will give the Trustee immediate notice (i) if at any time there is entered against the Borrower any order, decree, determination or instruction issued on the authority of any rule, regulation or proceeding of any governmental commission, bureau or other administrative agency or self-regulatory organization, including the SEC and the NYSE, which could have a material adverse effect on the ability of the Borrower to perform its obligations under this Agreement or to carry on its business as conducted at the date of this Agreement or which would prohibit expansion or require reduction of the business of the Borrower as conducted at the date of this Agreement or which might adversely affect the borrowing of securities by the Borrower, (ii) if at any time any litigation, arbitration or

similar proceeding against or affecting the Borrower is commenced which could have a material adverse effect on the ability of the Borrower to perform its obligations under this Agreement or to carry on its business as conducted at the date of this Agreement or which would prohibit expansion or require reduction of the business of the Borrower as conducted at the date of this Agreement or which might adversely affect the borrowing of securities by the Borrower, (iii) if at any time there is commenced any investigation or proceeding which may result in the expulsion of the Borrower from any stock exchange, including the NYSE, or from the National Association of Securities Dealers, Inc., or from any self-regulatory organization, or a suspension of the Borrower’s power under Federal or state law to transact business as a broker or dealer in securities or if the Borrower is so expelled or suspended, (iv) if at any time any communication is received by the Borrower from the SEC or any stock exchange, including the NYSE, constituting a warning to the Borrower of the violation, or threatened violation, of any rule of the SEC or of such exchange a failure to comply with which could have a material adverse effect on the ability of the Borrower to perform its obligations under this Agreement or to carry on its business as conducted at the date of this Agreement or result in a prohibition on expansion or a requirement for reduction of the business of the Borrower as conducted at the date of this Agreement or adversely affect the borrowing of securities by the Borrower, (v) if at any time the Borrower shall receive information that the Borrower is under special surveillance by any stock exchange, including the NYSE, or by any other self-regulatory organization, (vi) if at any time the Borrower shall receive information that the SEC or any self-regulatory organization, including the NYSE, has notified the Securities Investor Protection Corporation (“SIPC”) pursuant to Section 5(a) (1) of the Securities Investor Protection Act of 1970 (“SIPC Act”) of facts which indicate that the Borrower is in or is approaching financial difficulty, or (vii) if at any time SIPC shall file an application for a protective decree with respect to the Borrower under Section 5(a) (3) of the SIPC Act. Any such notice shall set forth in reasonable detail a description of the event which has occurred and of the action, if any, which the Borrower proposes to take with respect thereto. The Borrower will forward to the Trustee a copy of any order, decree, determination, instruction or other written evidence received by it of or with respect to any matter referred to in the first sentence of this subparagraph (b) with respect to which notice is required to be given to the Trustee by such sentence. The Borrower will comply with any such order, decree, determination or instruction within the time required for such compliance and with any changes of rules or regulations of the SEC or the NYSE or any other self-regulatory organization by the effective date thereof or the time for compliance specified therein or, within the time required for compliance, shall cause the same to be revoked, reversed or modified to the satisfaction of the Trustee.

(c) Further Acts. The Borrower will, from time to time, do and perform any and all acts and execute any and all further instruments required or reasonably requested by the Trustee more fully to effect the purposes of this Agreement and the pledge of the Collateral hereunder, including, without limitation, the execution and filing of financing statements and continuation statements relating to the Collateral under the provisions of the New York State Uniform Commercial Code.

9. Termination of Loans without a Default.

(a) Termination by the Borrower. The Borrower may at any time terminate any Loan by (unless otherwise agreed) giving the Trustee oral notice of such termination and delivering the Loaned Securities or Equivalent Securities with respect to such Loan to the Trustee on the date specified in such oral notice. The date so specified shall be as agreed by the Borrower and the Trustee. In the event that the Borrower terminates any term loan prior to the expiration of the agreed term, the Borrower may be liable for any costs or expenses incurred as a result thereof.

(b) Termination by the Trustee. Each Loan made hereunder shall be a demand loan. The Trustee may at any time terminate any Loan, in whole or in part, by giving the Borrower oral notice of such termination, whereupon such Loan, or the portion thereof being terminated, shall become due on the date specified in such notice unless it shall become due sooner pursuant to paragraph 10 hereof. The date so specified shall be not less than: (i) in the case of a Loan of U. S. Government Securities, one New York Business Day subsequent to the giving of such notice; and (ii) in the case of a Loan of any other Loaned Securities (unless otherwise agreed by the parties hereto as evidenced in the confirmation relating to a Loan), the

lesser of five days or the standard market settlement time in the principal market in which the Loaned Securities are traded. For purposes of clause (ii), if there is a difference between the settlement time for sales and purchases in the applicable market, the standard market settlement time for such market for purposes of this §9(b) shall be the shorter of the two times. The Borrower hereby unconditionally promises to redeliver the Loaned Securities that are the subject of any Loan so terminated to the Trustee through the same delivery means as the Loaned Securities were delivered by the Trustee to the Borrower, on the date so specified with respect to such Loan, which shall be within the same timeframe as applicable to the delivery of the Loaned Securities by the Trustee to the Borrower.

(c) Return of Collateral. Upon the termination of any Loan in accordance with this paragraph 9 and the return of the Loaned Securities with respect to such Loan to the Trustee, the Trustee shall, unless otherwise directed by the Borrower, deliver the Collateral then allocated to such Loan to the Borrower; provided, however, that if any default hereunder shall have occurred and be continuing the Trustee shall not be obligated to return any such Collateral until such default shall have been cured, and that if a record date for any distribution with respect to the Loaned Securities occurred during the period of such Loan and such distribution has not been paid or delivered to the Trustee, the Trustee may retain a portion of the Collateral for such Loan sufficient to satisfy the Borrower’s obligation with respect to such distribution until such obligation has been satisfied in accordance with paragraph 5(b) hereof. Such delivery shall occur on the date of the return of the relevant Loaned Securities. The Trustee acknowledges that, if at the election of the Borrower, upon the termination in accordance with this paragraph 9 of any Loan which is secured by a Letter of Credit, or a portion thereof, and the return of the Loaned Securities with respect to such Loan, such Letter of Credit, or portion thereof, is not returned to the Borrower, the Trustee shall have no further right to draw under such Letter of Credit with respect to such Loan to the extent that the obligations of the Borrower with respect to such Loan have been fully discharged and the payments and deliveries of Loaned Securities made in respect of such obligations are not subsequently recovered from the Trustee in any bankruptcy, insolvency or similar proceeding.

10. Defaults.

(a) Events of Default. Any one or more of the following events shall constitute an “Event of Default” hereunder:

(i) A failure by the Borrower to deliver any Loaned Securities on the date specified for such delivery in accordance with subparagraph 9(a) or (b) hereof or any other default by the Borrower in the due performance or observance of any covenant or agreement contained herein; or

(ii) Any representation or warranty made by the Borrower herein or in connection herewith or with any borrowing hereunder shall be breached or prove to have been untrue when made; or

(iii) A violation by the Borrower, in connection with any Loaned Securities or the holding or disposition thereof by the Borrower, of any applicable law, regulation or rule of the United States, any state or any instrumentality of either thereof, the NYSE or any other national securities exchange to the requirements of which the Borrower may be subject, or the Board of Governors of the Federal Reserve System or the National Association of Securities Dealers, Inc.; or

(iv) A violation by the Borrower of any rule limiting its aggregate indebtedness or requiring a minimum net capital imposed under the Securities Exchange Act of 1934, as amended, or the rules and regulations thereunder or imposed by any stock exchange, or the imposition, under any such rule, of a prohibition against expansion, or a requirement of any reduction, of the business of the Borrower; or

(v) The occurrence of any event of which the Borrower is required to notify the Trustee pursuant to clause (i), (iii), (vi), or (vii) of subparagraph 8(b) hereof; or

(vi) The Borrower or any bank which has issued a Letter of Credit held as Collateral shall (1) apply for or consent to the appointment of or the taking of possession by a trustee, receiver, custodian, liquidator, conservator or the like of itself or of all or any substantial part of its property, (2) admit in writing its inability, or be generally unable, to pay its debts as such debts become due or voluntarily suspend payment of its obligations, (3) make a general assignment for the benefit of its creditors, (4) commence a voluntary case under the Federal Bankruptcy Code (as now or hereafter in effect) or, in the case of any such bank, under the analogous law pertaining to it, (5) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts, (6) fail to controvert in a timely or appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case under such Bankruptcy Code or analogous law, or (7) take any corporate action for the purpose of effecting any of the foregoing; or

(vii) A proceeding or case shall be commenced, without the application or consent of the Borrower or any bank which has issued a Letter of Credit held as Collateral, as the case may be, before any court, agency or supervisory authority having jurisdiction in the premises, seeking (1) the liquidation, reorganization, dissolution, winding-up, marshaling of assets or composition or adjustment of debts of the Borrower or such bank, (2) the appointment of a trustee, receiver, custodian, liquidator, conservator or the like of the Borrower or such bank or of all or any substantial part of its assets or (3) similar relief in respect of the Borrower or such bank under any law relating to bankruptcy, insolvency, reorganization, winding-up or composition and adjustment of debts, and such proceeding or case shall continue undismissed, or an order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 30 days; or any action shall be taken by any agency or supervisory authority having jurisdiction which results in the occurrence of any of the events specified in clauses (1) through (3) above; or any order for relief against the Borrower or any such bank shall be entered in an involuntary proceeding or case under such Bankruptcy Code or, in the case of any such bank, under the analogous law pertaining to it.

(b) Automatic Termination. Upon the occurrence of any Event of Default all outstanding Loans shall terminate and become immediately due, without any notice or other action on the part of the Trustee, and the Borrower shall immediately deliver all Loaned Securities to the Trustee.

(c) Trustee’s Remedies. If an Event of Default shall have occurred and be continuing the Trustee may take whatever action at law or in equity may appear necessary or desirable to collect any and all amounts due and thereafter to become due hereunder and to enforce the performance or observance by the Borrower of any and all obligations, covenants and agreements of the Borrower under or in connection with this Agreement. Without in any way limiting the foregoing, if the Borrower shall fail to immediately deliver any Loaned Securities to the Trustee in accordance with subparagraph 10(b) hereof, the Trustee may in its sole discretion either (i) purchase securities equivalent to the Loaned Securities which have not been delivered, or any part thereof, in any principal market for such securities and apply such purchased securities towards the Borrower’s obligation to deliver such Loaned Securities, or (ii) by oral notice to the Borrower (confirmed in writing), and without purchasing equivalent securities, hold the Borrower liable for an amount equal to the Market Value (including for this purpose accrued interest to the date of such oral notice) of the Loaned Securities which have not been delivered, or any part thereof as specified in such notice, determined as of the date of such oral notice, whereupon the Borrower’s obligation to deliver such Loaned Securities to the Trustee hereunder (to the extent equivalent securities have been purchased or the Trustee has given an oral notice with respect thereto pursuant to clause (ii) above) shall terminate for all purposes and the Borrower shall thereafter be obligated to the Trustee hereunder for, and hereby agrees to pay to the Trustee, the full amount of the purchase price of such securities or the Market Value (including accrued interest as provided above) thereof, as the case may be.

(d) Application of Collateral. The Trustee shall have all of the rights, powers and remedies with respect to the Collateral of a secured party, or, in the case of Letters of Credit, a beneficiary, under the New York State Uniform Commercial Code as in effect from time to time. Without in any way limiting the foregoing, upon the occurrence of any Event of Default the Trustee may draw upon any Letters of Credit then held as Collateral and liquidate any or all other Collateral then held by it. The proceeds of the

foregoing, together with any Pledged Cash then held, may be applied by the Trustee to the payment of any and all amounts due and to become due to it hereunder, including without limitation amounts due to the Trustee in accordance with subparagraph 10(c) hereof. In addition to and without limiting the foregoing, the Trustee may sell or cause to be sold all or any of the Collateral in the Borough of Manhattan, New York City, or elsewhere, in one or more sales, at such price as the Trustee may deem best, and for cash or on credit or for future delivery, without assumption of any credit risk, at public or private sale, without demand of performance or notice of intention to sell or of time or place of sale (except such notice as is required by applicable statute and cannot be waived), and the Trustee or anyone else may be the purchaser of any or all of the Collateral so sold and thereafter hold the same absolutely, free from any claim or right of whatsoever kind, including any equity of redemption, of the Borrower, any such demand, notice or right and equity being hereby expressly waived and released. It is expressly understood and agreed by the parties hereto that any allocation of Collateral to any Loan or liabilities due to any Account pursuant to the terms hereof shall in no way affect the ability of the Trustee to apply such Collateral to the satisfaction of any obligation of the Borrower hereunder upon any default hereunder, regardless of the Loan or Account to which such obligation relates, and that all Collateral at any time given hereunder shall constitute collateral security for all the Borrower’s obligations to the Trustee hereunder without distinction of any kind and upon any default hereunder may be applied to any such obligation or obligations as the Trustee in its sole discretion may elect.

(e) Borrower’s Remedies. If at any time any Lender Default (as such term is hereinafter defined) shall have occurred and be continuing with respect to any Account, the Borrower may, by oral notice to the Trustee, declare all outstanding Loans made by such Account (the “Defaulted Loans”) to be terminated and to be immediately due, whereupon the same shall terminate and become immediately due without any further notice or other action on the part of the Borrower, and the Trustee shall immediately deliver all Collateral for such Defaulted Loans to the Borrower in accordance with subparagraph 9(c) hereof against receipt of the Loaned Securities which are the subject of such Defaulted Loans; provided, however, that upon the occurrence of any Lender Default referred to in clause (iv) of the definition of Lender Default below with respect to any Account all outstanding Loans made by such Account shall automatically terminate and become immediately due, without any notice or other action on the part of the Borrower, and the Trustee shall immediately deliver all Collateral for such Defaulted Loans to the Borrower in accordance with subparagraph 9(c) after tender to the Trustee of the Loaned Securities which are the subject of such Defaulted Loans. If the Trustee shall fail to deliver any such Collateral to the Borrower in accordance with this subparagraph 10(e) after tender to the Trustee of the Loaned Securities which are the subject of the Loan secured by such Collateral, the Borrower shall have the right, in addition to any other remedies which may be available at law or in equity, after oral notice (confirmed in writing) to the Trustee, to sell in a commercially reasonable manner, the Loaned Securities then held by it which are the subject of the Loan secured by such Collateral, for the account of the Account which made such Loan, and apply the proceeds of such sale in accordance with this subparagraph 10(e). Upon receipt by the Trustee of any such notice of sale, the Trustee’s obligation to return any Pledged Cash or Approved Securities allocated to the Loan with respect to which such notice was given which have not theretofore been returned to the Borrower shall terminate for all purposes and the Trustee shall thereafter be obligated, on behalf of the Account, to the Borrower hereunder, with respect to such Loan, for, and hereby agrees to pay to the Borrower, an amount equal to such Pledged Cash and the Market Value (including for this purpose accrued interest to the date of the relevant Lender Default) of such Approved Securities, determined as of the date of the relevant Lender Default. The proceeds of any sale of Loaned Securities under this subparagraph 10(e) shall be automatically applied to the payment of any and all amounts due to the Borrower hereunder from the Account which loaned such Loaned Securities to the Borrower, including without limitation amounts due to the Borrower in accordance with this subparagraph 10(e). Except as otherwise provided in this subparagraph 10(e), if a Lender Default has occurred with respect to any Account and the Loans made by such Account have been terminated pursuant to this subparagraph 10(e), the Borrower shall not be obligated to (i) return any Loaned Securities which are the subject of any Defaulted Loan made by such Account, or the proceeds of any sale thereof, or (ii) pay or deliver to the Trustee pursuant to subparagraph 5(b) hereof any interest, dividends or other distributions with respect to the Loaned Securities which are the subject of any Defaulted Loan made by such Account until all of the obligations hereunder of such Account have been satisfied; provided, however, that upon satisfaction of all obligations of such Account hereunder any and all such Loaned

Securities, proceeds, interest, dividends and other distributions which have not been applied to the satisfaction of such obligations shall be returned to the Trustee for the account of such Account. As used herein, the term “Lender Default” shall mean, with respect to any Account, any one or more of the following events: (i) a failure by such Account to deliver any Pledged Cash or Approved Securities to the Borrower in accordance with subparagraph 9(c) hereof; (ii) a failure by such Account to deliver any Collateral to the Borrower in accordance with subparagraph 6(b) hereof; (iii) a failure by such Account to pay or deliver to the Borrower any interest payment or other distribution on any Approved Securities held as Collateral in accordance with subparagraph 4(c) hereof and the continuance of such default for a period of one Business Day after written notice thereof has been given to the Trustee by the Borrower; (iv) such Account, if such Account is not an employee benefit plan subject to ERISA, shall make a general assignment for the benefit of its creditors, or shall admit in writing its inability to pay its debts as they become due, or shall file a petition in bankruptcy or shall be adjudicated a bankrupt or insolvent, or shall file a petition seeking reorganization, liquidation, dissolution or similar relief under any present or future statute, law or regulation, or shall seek, consent to or acquiesce in the appointment of any liquidator (or similar official) of itself or of any material part of its properties, or any petition, not dismissed within 30 calendar days, shall be filed against such Account (other than by the Borrower) in any court or before any agency alleging the bankruptcy or insolvency of such Account or seeking any reorganization, arrangement, composition, readjustment of debts, liquidation, dissolution or similar relief with respect to such Account under any present or future statute, law or regulation, or the appointment of a liquidator of all or any material part of such Account’s property, or, if such Account is an employee benefit plan subject to ERISA, the Pension Benefit Guaranty Corporation, or any successor thereof, shall institute proceedings to terminate such plan under section 4042 of ERISA; or (v) such Account, if such Account is not an employee benefit plan subject to ERISA, shall have any license, charter or other authorization necessary to conduct a material portion of its business withdrawn, suspended or revoked by any applicable federal or state government or agency thereof, or, if such Account is an employee benefit subject to ERISA, a final determination shall be rendered that such plan no longer is exempt from tax under Section 501(a) of the Internal Revenue Code of 1986, as amended.

(f) Payment of Expenses. If any Event of Default shall occur the Borrower shall pay to the Trustee, on demand, all out-of-pocket expenses, including reasonable attorneys’ fees, paid or incurred by the Trustee in realizing upon any Collateral or enforcing any covenants or obligations hereunder and all fees, commissions, taxes and other out-of-pocket expenses, including reasonable attorneys’ fees, paid or incurred in connection with the purchase of any equivalent securities in accordance with subparagraph 10(c) hereof. Amounts payable under this subparagraph 10(f) and subparagraph 10(c) hereof shall be paid to the Trustee by the Borrower on demand, together with interest thereon from the date such amounts were paid by the Trustee or otherwise became payable to the Trustee to the date of the payment of such amounts to the Trustee, whether out of the proceeds of Collateral or otherwise, at a rate per annum equal to 1/2 of 1% above the prime commercial lending rate per annum as announced from time to time by JPMorgan Chase Bank at its principal office in New York, as in effect from time to time during such period, but in no event at a rate in excess of the highest rate permissible under any applicable usury law.

(g) Remedies Cumulative. No remedy herein conferred upon the Trustee or the Borrower shall be exclusive of any other remedy but each and every such remedy shall be cumulative and shall be in addition to every remedy given to such party under this Agreement or now or hereafter existing at law or in equity or by statute.

(h) Return of Collateral After a Default. If the Loans hereunder have been terminated pursuant to subparagraph 10(b) hereof, the Trustee shall not be obligated to return any Collateral to the Borrower until (i) all Loaned Securities have been returned to the Trustee or securities equivalent to such Loaned Securities have been acquired by the Trustee, (ii) all amounts due and to become due hereunder have been paid to the Trustee in full, and (iii) the Borrower has delivered to the Trustee any and all property of any kind which it is then or may thereafter be required to deliver to the Trustee hereunder. If each of the conditions in the preceding sentence is satisfied the Trustee shall deliver all Collateral then held by it which has not been applied to the satisfaction of the Borrower’s obligations hereunder to the Borrower.

11. Transfer Taxes, Necessary Costs and Compensation. The Borrower shall pay all transfer taxes and necessary costs with respect to the transfer of Loaned Securities by the Trustee to the Borrower and from the Borrower to the Trustee upon the termination of each Loan. In addition, the Borrower shall reimburse the Trustee for any loss, including interest and/or penalties, incurred by the Trustee by reason of the Borrower’s failure to pay all such taxes and costs. Except as otherwise expressly provided in paragraph 10 hereof, the Borrower shall pay the Trustee interest on any and all amounts not paid when due hereunder from the date due until paid at the current daily average offered rate for federal funds.

12. Addition and Removal of Accounts. The Account which makes any particular Loan shall be determined in the sole discretion of the Trustee at the time such Loan is made and recorded in the Trustee’s books (which shall be conclusive). The Borrower agrees to accept any loan of securities requested by it from any Account or Accounts listed in Appendix A hereto (except that Borrower may delete one or more Accounts from Appendix A on not less than five Business Days prior notice to the Trustee), and the Trustee shall not be required to notify the Borrower at any time as to which of such Accounts has made or may make any Loan hereunder; provided, however, that the Trustee shall record with respect to each Loan the identity of the lending Account. The Trustee may at any time amend Appendix A hereto to add further trusts and accounts to the list of Accounts set forth therein and to remove Accounts from such list by delivering a copy of the amendment to Appendix A to the Borrower. Any such amendment shall become effective 10 Business Days after the receipt thereof by the Borrower unless the Trustee has theretofore received a written notice from the Borrower objecting to such amendment.

Notwithstanding anything contained in this Agreement that may be to the contrary, information concerning both the addition and deletion by Trustee of Account(s) from Appendix A and the acceptance or objection by Borrower to the addition of Account(s) to Appendix A may in each case be communicated by e-mail (with a “return receipt” requested), which e-mail shall be sent (i) by a person who would otherwise be authorized to send the same if it were sent in writing, and (ii) to any person who would otherwise be authorized to receive the same if it were sent in writing.

13. Indemnification. The Borrower agrees to indemnify and hold harmless the Trustee from any and all damages, losses, liabilities, costs and expenses (including reasonable attorneys’ fees) which the Trustee may incur or suffer arising in any way out of the use by the Borrower of Loaned Securities or any failure of the Borrower to deliver Loaned Securities in accordance herewith or otherwise comply with the terms of this Agreement, except those caused by the gross negligence or willful misconduct of the Trustee.

14. Notices, Deliveries, etc. All oral notices specified herein shall be given in person or by telephone. All other notices and communications hereunder shall be in writing and all such other notices and communications, and all deliveries and payments hereunder, shall be delivered by hand or mailed by certified or registered mail, or given by telegram confirmed by certified or registered mail as follows:

If to the Trustee, to:

JPMorgan Chase Bank

Securities Lending Division

4 New York Plaza

New York, New York 10004

Attention: Securities Lending Business Executive

Telephone: (212) 623-2944

If to the Borrower, to:

or, in either case, to such other person and at such other address or telephone number as either party may designate by written notice to the other hereunder.

15. Miscellaneous. Neither this Agreement, any obligation to return a security borrowed hereunder or any other obligation of the Borrower hereunder shall be assignable by either party without the prior written consent of the other party. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. This Agreement shall be governed by and construed in accordance with the law of the State of New York, except to the extent such law is preempted by ERISA or other applicable Federal law. This Agreement shall not be modified or amended except by an instrument in writing signed by each of the parties hereto.

16 Fees. The compensation in connection with Loans and the manner of payment thereof shall be as agreed upon from time to time by the parties hereto. With respect to Loans secured by Approved Securities, the Borrower shall pay to the Trustee a loan fee negotiated at the time of the Loan. With respect to Loans secured by Pledged Cash, the Trustee shall pay to the Borrower a rate of interest earned on Pledged Cash investments as negotiated at the time of the Loan or subsequently revised from time to time by the mutual consent of the parties. Each agreement by the parties hereto with respect to the foregoing matters shall be evidenced by a written confirmation from the Trustee to the Borrower and shall be deemed to be, and shall be, a part of this Agreement for all purposes hereof as fully as if such agreement were set forth herein in full, and each and every amount due under any such agreement shall be deemed to constitute, and shall constitute, an amount due under this Agreement for all purposes hereof.

17. SIPC Act. THE TRUSTEE ACKNOWLEDGES THAT THE PROVISIONS OF THE SECURITIES INVESTORS PROTECTION ACT OF 1970 MAY NOT PROTECT THE TRUSTEE OR THE ACCOUNTS WITH RESPECT TO THE SECURITIES LOAN TRANSACTIONS HEREUNDER BETWEEN THE TRUSTEE AND THE BORROWER AND THAT, THEREFORE, THE COLLATERAL DELIVERED BY THE BORROWER TO THE TRUSTEE MAY IN EFFECT CONSTITUTE THE ONLY SOURCE OF SATISFACTION OF THE BORROWER’S OBLIGATIONS IN THE EVENT THE BORROWER FAILS TO RETURN THE SECURITIES. The Trustee agrees to notify the Accounts of this provision. This provision does not constitute a limitation on any obligations of the Borrower hereunder or a waiver by the Trustee of any of its rights hereunder.

18. Effective Date. This Agreement shall be and become effective as of the date first above written.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their respective duly authorized officers as of the date first above written.


JPMORGAN CHASE BANK
as trustee and managing agent

By
Name:
Title:

as borrower

By
Name:
Title:

INTERNATIONAL ADDENDUM TO MASTER

SECURITIES LENDING AGREEMENT

ADDENDUM, dated , 2003 , to the Master Securities Lending Agreement, as amended (“Agreement”), dated , between (the “Borrower”) and JPMORGAN CHASE BANK, as trustee or managing agent for certain trusts or accounts (the “Trustee”).

It is hereby agreed as follows:

1. Unless otherwise provided herein, all terms and conditions of the Agreement are expressly incorporated herein by reference and except as modified hereby, the Agreement is confirmed in all respects. Capitalized terms used herein without definition shall have the meanings ascribed to them in the Agreement.

2. Section 1 of the Agreement is amended as follows:

a. The definition of “Approved Securities” is amended by inserting the phrase “(“U.S. Government Securities”) or any other securities, in each case” after the word “government”.

b. The definition of “business day” is deleted and replaced in appropriate alphabetic sequence by the following:

“Foreign Business Day” shall mean (unless otherwise agreed) with respect to: (i) International Securities (whether comprising Loaned Securities or Collateral consisting of Approved Securities), any day on which banks are open for business in the country in which the principal market for such Securities is located and on which regular trading therein occurs in such Securities in such market, and (ii) cash Collateral denominated in other than U.S. dollars, any day on which banks are open for business in the country of issuance of such cash.

“New York Business Day” shall mean (unless otherwise agreed) with respect to (i) Loaned Securities other than International Securities and (ii) Collateral comprising Letters of Credit, and U.S. dollar-denominated Approved Securities and cash, any day on which national banks and the NYSE are open for business in New York City.

c. The definition of “Collateral” is amended by adding the words “or International Securities” after the words “Approved Securities” in clause (b) thereof.

d. A new term, “Dollar Equivalent”, is added. “‘Dollar Equivalent’ shall mean, as of any date of determination thereof, in respect of any International Securities or Collateral denominated or issued in an International Currency or otherwise, the equivalent thereof in United States dollars calculated by the Trustee on the basis of the most current spot rate of exchange quoted by JPMorgan Chase Bank, or other source selected by the Trustee in its sole discretion, for selling the relevant International Currency for United States dollars in a recognized foreign exchange market selected by the Trustee in its sole discretion.”

e. A new term, “International Currency”, is added. “‘International Currency’ shall mean a currency other than United States dollars which is freely transferable and freely convertible into United States dollars.”

f. A new term, “International Securities”, is added. “‘International Securities’ shall mean, with respect to a Loan, securities denominated or issued in an International Currency which are acceptable to the Trustee in its sole discretion.”

g. The definition of “Letter of Credit” is amended in clause (e) by adding the words “and is payable in such currency or currencies” after the word “provisions” and by adding the words “in its sole discretion” after the word “Trustee”.

h. The definition of “Market Value” is amended as follows: The reference to “national” in clause (b) is replaced with the words “foreign or domestic”; the reference to “national” in clause (c) is replaced with the word “such”; the parenthetical in clause (c) is amended by adding the words “to or” following the word “provided”; the parenthetical in clause (d) is amended by adding the words “to or” following the word “provided”; the proviso clause in the first sentence is amended by adding, between the words “security” and “held”, the words “determined in clauses (a)-(d) hereinabove shall include accrued interest and the market value of any security”; the phrase “New York Business Day” is substituted for the phrase “business day”; and the phrase “New York Business Days” is substituted for the phrase “business days”; and a new last sentence is added, namely, “In all cases involving International Securities or Collateral denominated or issued in an International Currency, Market Value shall be adjusted by the Trustee to a Dollar Equivalent”.

3. Section 3(a) of the Agreement is amended by inserting the phrase “prior or contemporaneous” after the word “against” in the first sentence thereof.

Section 3(a) of the Agreement is amended by adding to the first sentence thereof the words “as evidenced in the relevant Loan Confirmation” after the word “Borrower” and by adding the words “(other than International Securities)” after the reference to both “Loaned Securities” and “Approved Securities” therein.

Section 3(a) is further amended by adding a new last sentence, namely, “Delivery of International Securities shall be effected in the manner agreed to by the Trustee and the Borrower, as evidenced in the relevant Loan confirmation.”

4. Section 3(b) of the Agreement is amended by adding a new clause (iii), “International Securities” and designating existing clause (iii) as (iv).

5. Section 3(d) of the Agreement is amended by substituting the phrase “New York Business Day” for the phrase “business day”.

6. Section 4(c) of the Agreement is amended by adding the words “or International Securities” after each reference to the words “Approved Securities” in the first, second, fourth, fifth, and sixth sentences thereof.

Section 4(c) is further amended by adding the words “, as the case may be,” after the word Trustee in the fourth sentence thereof.

7. Section 5(b) of the Agreement is amended by inserting the following after the phrase “the Borrower shall, within one business day after the payment or distribution thereof” in the second sentence thereof: “(and such business day shall be a New York Business Day with respect to interest, dividends and distributions denominated in U.S. dollars or otherwise paid or issued in respect of Loaned Securities other than International Securities and shall be a Foreign Business Day in respect of all other interest, dividends and distributions)”.

8. Section 6(b) of the Agreement is amended by inserting the following after the phrase “such demand” in the last sentence thereof: “, and such business day shall be a New York Business Day with respect to Collateral denominated in U.S. dollars or delivered to the Trustee in New York and shall be a Foreign Business Day in respect of all other Collateral”.

9. Section 6(d) of the Agreement is amended by substituting the following sentence for the existing second sentence:

If at any time the Trustee is required, or desires, to return a portion of any Approved Security or International Security held by it as Collateral to the Borrower pursuant to this Agreement, the Borrower shall, at the oral request of the Trustee, take all such action as is necessary to cause such Approved Security or International Security to be reissued in such denominations as are required to permit such a partial return and in such case the Trustee shall not be obligated to return Collateral hereunder unless and until such action has been taken and may thereafter make required returns of Collateral hereunder by returning Approved Securities or International Securities, as the case may be, in such amounts as are, as nearly as practicable, equal to but not greater than the required return.

Section 6(d) is further amended by inserting, in the third sentence thereof, the words “or International Securities, as the case may be,” after the initial reference to “Approved Securities” therein.

10. Section 9(a) of the Agreement is amended by adding the following at the end thereof: “and whether such business days shall be New York Business Days or Foreign Business Days shall be determined by reference to the location of the principal trading market for the Loaned Securities which are the subject of the Loan being terminated.

11. Section 9(c) of the Agreement is amended by inserting: the (i) phrase “of Collateral” after the phrase “Such delivery” in the second sentence thereof”; and (ii) following after the phrase “Loaned Securities” in the second sentence thereof: “where the Loaned Securities are not International Securities. Where the Loaned Securities are International Securities, return of Collateral shall occur on or before the New York Business Day next succeeding the Foreign Business Day on which the Loaned Securities were returned.”

12. Section 10(a)(iii) of the Agreement is amended by adding the words “or any foreign jurisdiction” after the words “rule of the United States” and deletion of the word “national” in the words “the NYSE or any other national securities exchange.

13. Section 10(a)(vi)(7) of the Agreement is amended by adding the words “or effect any process under the laws of any jurisdiction” after the words “take any corporate action”.

14. Section 10(c) of the Agreement is amended by substituting the following clause for existing clause (i):

purchase securities equivalent to the Loaned Securities which have not been delivered, or any part thereof, in any principal market for such securities and apply the Market Value of such purchased securities against the Market Value of the Loaned Securities on the date of such purchase.

Section 10(c) of the Agreement is further amended by adding the following as a new subparagraph at the end thereof:

If the Borrower fails to return Loaned Securities when due (at a time when the Account is obligated to deliver the Loaned Securities to settle a sale to third party (“Account Counterparty”)) and this results in a buy-in of equivalent securities by the Account Counterparty, Borrower shall, promptly upon demand therefor, reimburse Trustee for any loss, including interest and/or penalties, incurred by the Trustee and the Account arising from or relating to such buy-in.

15. Section 10(e) of the Agreement is amended by substituting the phrase “New York Business Day” for the phrase “business day”.

16. Section 10(f) is amended as follows: In the first sentence thereof, the words “and as of the date of any” are added immediately prior to the word “demand” and immediately subsequent to the word “demand” the comma is deleted and the following words are added: “therefor, an amount in United States dollars equal to the Dollar Equivalent of”. The first two clauses of the second sentence (but no other clauses therein) are revised to read as follows: “Amounts payable under this subparagraph 10(f) and subparagraph 10(c) hereof shall be paid in United States dollars to the Trustee by the Borrower on and as of the date of any demand therefor, together with the interest thereon in United States dollars from the date such amounts were paid by the Trustee (including, where applicable, Dollar Equivalents thereof) to the date of the repayment of such amounts to the Trustee,”.

17. Section 11 of the Agreement is amended by inserting the following: (i) as a new first sentence, “All transfers of Loaned Securities shall be in good deliverable form.”; (ii) after the word “taxes” in the existing first sentence thereof, “, relevant stamp duties, registration fees”; and (iii) after the word “costs” in the existing first sentence thereof, “and shall arrange for transfer deeds and/or documents, and shall pay any other applicable fees and expenses”.

Section 11 of the Agreement is further amended so that the existing second and third sentences read as follows:

In addition, the Borrower shall reimburse the Trustee in United States dollars for the Dollar Equivalent of any loss, including interest and/or penalties, incurred by the Trustee by reason of the Borrower’s failure to pay all such taxes and costs and to arrange for such transfer deeds and/or documents and to pay any other applicable fees and expenses, as of the date of the incurrence of any such loss by the Trustee. Except as otherwise expressly provided in paragraph 10 hereof, the Borrower shall pay the Trustee interest in United States dollars on any and all amounts (including, where applicable, Dollar Equivalents thereof) not paid when due hereunder from the date due until paid at the current daily average offered rate for federal funds.

18. Section 12 of the Agreement is amended by substituting the phrase “New York Business Days” for the phrase “business days” in the last sentence thereof.

19. Section 13 of the Agreement is amended by adding the following sentences:

Without limiting the foregoing, if, under any applicable law and whether pursuant to a judgment, against the Borrower or the liquidation, bankruptcy or analogous process of the Borrower or for any other reason, any amount due to the Trustee hereunder or in respect of any Loan is paid in a currency other than United States dollars, then to the extent that the payment actually received by the Trustee (when converted into a Dollar Equivalent on the first day after the date of payment on which it is practicable for the Trustee to effect the conversion) falls short of the amount due hereunder or under the terms of the relevant Loan, the Borrower shall, as a separate and independent obligation, indemnify the Trustee and hold the Trustee harmless against the amount of such shortfall.”

20. Section 14 of the Agreement is amended by deleting the first two sentences thereof and substituting, in lieu thereof, the following:

“14. Notices, Deliveries, etc. All oral notices specified herein shall be given in person or by telephone, if to the Trustee, to the Securities Lending Business Executive at the address for the Trustee specified below or at telephone number [ ] and, if to the Borrower, to at the address for the Borrower specified below or at telephone number , or to such other person and at such other address or telephone number as either party may designate by written notice to the other hereunder. All other notices and communications hereunder shall be in writing and delivered by hand or mailed by certified or registered mail, if to the Trustee, to JPMorgan Chase Bank, [ ],

Attention: Securities Lending Division, Securities Lending Business Executive, and if to the Borrower to , or at such other address and number as either party may designate by written notice to the other hereunder.”

Section 14 of the Agreement is further amended by adding the following at the end thereof:

Deliveries of Loaned Securities and Collateral and payments due hereunder or in respect of any Loan may be made in any manner to any designee of the Borrower or the Trustee, as the case may be, upon agreement of the other party as evidenced in the relevant Loan confirmation.

IN WITNESS WHEREOF, the parties have executed this Addendum as of the date first above written.


						JPMORGAN CHASE BANK. as trustee and managing agent

Insert name of Borrower

By:						By:
Name:						Name:
Title:						Title:
Date:						Date:

SOUTH AFRICA ADDENDUM

TO MASTER SECURITIES LENDING AGREEMENT

ADDENDUM dated 200 , to the Master Securities Lending Agreement dated , between , (the “Borrower”) and JPMorgan Chase Bank, as trustee or managing agent for certain trusts of accounts (the “Trustee”).

It is hereby agreed as follows:

Paragraph 7 of the Agreement is hereby amended by adding the following as a new Paragraph 7(d) thereof: “The Borrower: (i) shall borrow ‘South African Securities’ (as hereinafter defined) solely in order to effect delivery of such Securities under a transaction entered into by the Borrower to sell the Securities; and (ii) hereby covenants that it shall transfer South African Securities of the same kind and of the same or equivalent quantity and quality to the Lender within a period of twelve months from the date of such borrowing. For the avoidance of doubt, the Borrower hereby confirms that the foregoing representations, warrants and covenants shall survive the making of any Loan of South African Securities until the return thereof by Borrower. For purposes hereof, ‘South African Securities’ shall mean any marketable security contemplated in Item 15 of Schedule 1 of the South African Stamp Duties Act, 1968 (as amended) (‘1968 Act’) (but, for purposes of clarity, shall not include any marketable security made out to bearer or in any manner so as to be transferable by delivery only).”

Subparagraph 9(a) of the Agreement is hereby amended by adding the following at the end thereof: “In any event, with respect to South African Securities, the Borrower shall terminate any Loan of such Securities no later than twelve months from the making of such Loan, regardless of whether the Borrower shall have received notice of termination thereof. This obligation of termination shall be solely the Borrower’s, and the Borrower shall be responsible for any stamp or other taxes or charges that may be assessed or incurred as a result of the Borrower’s failure to terminate such Loans within such twelve month period, including, but not limited to, stamp or other taxes or charges resulting from such Loans of South African Securities not falling within the exemption from stamp duties and other taxes as set out in the 1968 Act and the South African Uncertificated Securities Tax, 1998 (as amended). In addition, Borrower shall be responsible for, and shall hold Trustee harmless from and against, any stamp or other taxes or charges that may be assessed or incurred as a result of the Borrower’s failure to comply with the conditions for exemption from such stamp or other taxes or charges including, but not limited to, those conditions set out in subparagraph 7(d) above.”

In witness whereof, the parties have executed this Addendum as of the date first above written.


(Borrower)						JPMORGAN CHASE BANK as trustee or managing agent

By:						By:
Name:						Name:
Title:						Title:
Date:						Date:

TURKEY ADDENDUM

TO MASTER SECURITIES LENDING AGREEMENT

ADDENDUM dated , 200 , to the Master Securities Lending Agreement dated , 200 , (the “Agreement”) between (the “Borrower”) and JPMORGAN CHASE BANK, as trustee or managing agent for certain trusts or accounts (the “Trustee”).

It is hereby agreed as follows:

Section 5(b) of the Agreement is amended by inserting the following after the phrase “received the same” in the second sentence thereof:

(except that in the case of any such payment or distribution on Loaned Securities that are of a Turkish issuer, the Borrower shall remit all such interest, dividends and other distributions to the Trustee within two weeks of the issuance of the same)

In all other respects, the Agreement shall remain unchanged and in full force and effect. All references to the Agreement shall hereafter be deemed to mean and refer to the Agreement as amended by this Addendum.

In witness whereof, the parties have executed this Addendum as of the day and year above written.


As borrower						JPMORGAN CHASE BANK as trustee and managing agent

By						By

DATED

OVERSEAS SECURITIES LENDER’S AGREEMENT

CONTENTS


Clause		Page
1.	INTERPRETATION	1
2.	LOANS OF SECURITIES	14
3.	DELIVERY OF SECURITIES	15
4.	RIGHTS AND TITLE	15
5.	RATES	18
6.	COLLATERAL	19
7.	REDELIVERY OF EQUIVALENT SECURITIES	23
8.	SET-OFF ETC.	24
9.	TAXATION	26
10.	LENDER’S WARRANTIES	27
11.	BORROWER’S WARRANTIES	27
12.	EVENTS OF DEFAULT	28
13.	OUTSTANDING PAYMENTS	29
14.	TRANSACTIONS ENTERED INTO AS AGENT	29
15.	TERMINATION OF COURSE OF DEALINGS BY NOTICE	31
16.	GOVERNING PRACTICES	32
17.	OBSERVANCE OF PROCEDURES	32
18.	SEVERANCE	32
19.	SPECIFIC PERFORMANCE	32
20.	NOTICES	32
21.	ASSIGNMENT	32
22.	NON-WAIVER	33
23.	ARBITRATION AND JURISDICTION	33
24.	TIME	33
25.	RECORDING	33
26.	GOVERNING LAW	33
27.	SCHEDULE	35
28.	APPENDIX	38

THIS AGREEMENT is made the day of , 2002

BETWEEN:-

(1)	JPMORGAN CHASE BANK (London branch) incorporated with limited liability as a New York State chartered bank registered in England as a branch; and whose registered branch address is 125 London Wall, London, EC2Y 5AJ.

(2)	[Insert name of Borrower]

WHEREAS:-

The Parties hereto are desirous of agreeing a procedure whereby either one of them (the “Lender”) will make available to the other of them (the “Borrower”) from time to time Securities (as hereinafter defined) in order to enable the Borrower, subject to any Inland Revenue provisions then in force, to fulfil a contract to sell such Securities or to on lend such Securities to a third party to enable such party to fulfil a contract to sell such Securities, whether or not as part of a chain of arrangements to enable the final party in such chain to fulfil a contract to sell such Securities or to replace an existing loan of Securities to such third party, or for other purposes.

2.	All transactions carried out under this Agreement will be effected in accordance with the Rules (as hereinafter defined) TOGETHER WITH current market practices, customs and conventions.

NOW THIS AGREEMENT WITNESSETH AND IT IS HEREBY AGREED AS FOLLOWS:-

1.	INTERPRETATION

(A)	In this Agreement:-

“Act of Insolvency” means in relation to either Party


		(i) its making a general assignment for the benefit of, or entering into a reorganisation, arrangement, or composition with creditors, or

		(ii) its admitting in writing that it is unable to pay its debts as they become due, or

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		(iii) its seeking, consenting to or acquiescing in the appointment of any trustee, administrator, receiver or liquidator or analogous officer of it or any material part of its property, or;

		(iv) the presentation or filing of a petition in respect of it (other than by the other Party to this Agreement in respect of any obligation under this Agreement) in any court or before any agency alleging or for the bankruptcy, winding-up or insolvency of such Party (or any analogous proceeding) or seeking any reorganisation, arrangement, composition, re-adjustment, administration, liquidation, dissolution or similar relief under any present or future statute, law or regulation, such petition (except in the case of a petition for winding-up or any analogous proceeding in respect of which no such 30 day period shall apply) not having been stayed or dismissed within 30 days of its filing;

		(v) the appointment of a receiver, administrator, liquidator or trustee or analogous officer of such Party over all or any material part of such Party’s property; or

		(vi) the convening of any meeting of its creditors for the purpose of considering a voluntary arrangement as referred to in Section 3 of the Insolvency Act 1986 (or any analogous proceeding);

“Agent”		shall have the same meaning given in Clause 14;

“Alternative Collateral”		means Collateral of a Value equal to the Collateral delivered pursuant to Clause 6 and provided by way of substitution for Collateral originally delivered or previously substituted in accordance with the provisions of Clauses 6(F) or 6(G);

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“Appropriate Tax Vouchers” means:-

		(i) either such tax vouchers and/or certificates as shall enable the recipient to claim and receive from any relevant tax authority, in respect of interest, dividends, distributions and/or other amounts (including for the avoidance of doubt any manufactured payment) relating to particular Securities, all and any repayment of tax or benefit of tax credit to which the Lender would have been entitled but for the loan of Securities in accordance with this Agreement and/or to which the Lender is entitled in respect of tax withheld and accounted for in respect of any manufactured payment; or such tax vouchers and/or certificates as are provided by the Borrower which evidence an amount of overseas tax deducted which shall enable the recipient to claim and receive from any relevant tax authority all and any repayment of tax from the UK Inland Revenue or benefits of tax credit in the jurisdiction of the recipient’s residence; and

		(ii) such vouchers and/or certificates in respect of interest, dividends, distributions and/or other amounts relating to particular Collateral;

“Approved UK Collecting Agent”		means a person who is approved as such for the purposes of the Rules of the UK Inland Revenue relating to stocklending and manufactured interest and dividends;

“Approved Intermediary”		means a person who is approved as such for the purposes of the Rules of the UK Inland Revenue relating to stocklending and manufactured interest and dividends;

“Assured Payment”		means a payment obligation of a Settlement Bank arising (under the Assured Payment Agreement) as a result of a transfer of stock or other securities to a CGO stock account of a member of the CGO for whom that Settlement Bank is acting;

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“Assured Payment Agreement”		means an agreement dated 24 October 1986 between the Bank of England and all the other banks which are for the time being acting as Settlement Banks in relation to the CGO regulating the obligations of such banks to make payments in respect of transfers of securities through the CGO as supplemented and amended from time to time;

“Base Currency”		has the meaning given in the Schedule hereto;

“Bid Price”		in relation to Equivalent Securities or Equivalent Collateral means the best available bid price thereof on the most appropriate market in a standard size;

“Bid Value”		Subject to Clause 8(E) means:-

		(a) in relation to Equivalent Collateral at a particular time:-

		(i) in relation to Collateral Types B(x) and C (more specifically referred to in the Schedule) the Value thereof as calculated in accordance with such Schedule;

		(ii) in relation to all other types of Collateral (more specifically referred to in the Schedule) the amount which would be received on a sale of such Collateral at the Bid Price thereof at such time less all costs, fees and expenses that would be incurred in connection with selling or otherwise realising such Equivalent Collateral, calculated on the assumption that the aggregate thereof is the least that could reasonably be expected to be paid in order to carry out such sale or realisation and adding thereto the amount of any interest, dividends, distributions or other amounts paid to the Lender and in respect

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		of which equivalent amounts have not been paid to the Borrower in accordance with Clause 6(G) prior to such time in respect of such Equivalent Collateral or the original Collateral held gross of all and any tax deducted or paid in respect thereof;

		and

		(b) in relation to Equivalent Securities at a particular time the amount which would be received on a sale of such Equivalent Securities at the Bid Price thereof at such time less all costs, fees and expenses that would be incurred in connection therewith, calculated on the assumption that the aggregate thereof is the least that could reasonably be expected to be paid in order to carry out the transaction;

“Borrower”		with respect to a particular loan of Securities means the Borrower as referred to in Recital 1 of this Agreement;

“Borrowing Request”		means a request made (by telephone or otherwise) by the Borrower to the Lender pursuant to Clause 2(A) specifying the description, title and amount of the Securities required by the Borrower, the proposed Settlement Date and duration of such loan and the date, time, mode and place of delivery which shall, where relevant, include the bank agent clearing or settlement system and account to which delivery of the Securities is to be made;

“Business Day”		means a day on which banks and securities markets are open for business generally in London and, in relation to the delivery or redelivery of any of the following in relation to any loan, in the place(s) where the relevant Securities, Equivalent Securities, Collateral (including Cash Collateral) or Equivalent Collateral are to be delivered;

“Cash Collateral”		means Collateral that takes the form of a deposit of currency;

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“Central Gilts Office” or “CGO”		means the computer based system managed by the Bank of England to facilitate the book-entry transfer of gilt-edged securities;

“CGO Collateral”		shall have the meaning specified in paragraph A of the Schedule;

“CGO Rules”		means the requirements of the CGO for the time being in force as defined in the membership agreement regulating membership of the CGO;

“Close of Business”		means the time at which banks close in the business centre in which payment is to be made or Collateral is to be delivered;

“Collateral”		means such securities or financial instruments or deposits of currency as are referred to in the Schedule hereto or any combination thereof which are delivered by the Borrower to the Lender in accordance with this Agreement and shall include the certificates and other documents of or evidencing title and transfer in respect of the foregoing (as appropriate), and shall include Alternative Collateral;

“Defaulting Party”		shall have the meaning given in Clause 12;

“Equivalent Collateral” or		in relation to any Collateral provided under this Agreement

“Collateral equivalent to”		means securities, cash or other property, as the case may be, of an identical type, nominal value, description and amount to particular Collateral so provided and shall include the certificates and other documents of or evidencing title and transfer in respect of the foregoing (as appropriate). If and to the extent that such Collateral consists of securities that are partly paid or have been converted, subdivided, consolidated, redeemed, made the subject of a takeover, capitalisation issue, rights issue or event similar to any of the foregoing, the expression shall have the following meaning:

		(a) in the case of conversion, subdivision or consolidation the securities into which the relevant

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		Collateral has been converted, subdivided or consolidated PROVIDED THAT, if appropriate, notice has been given in accordance with Clause 4(B)(vi);

		(b) in the case of redemption, a sum of money equivalent to the proceeds of the redemption;

		(c) in the case of a takeover, a sum of money or securities, being the consideration or alternative consideration of which the Borrower has given notice to the Lender in accordance with Clause 4(B)(vi);

		(d) in the case of a call on partly paid securities, the paid-up securities PROVIDED THAT the Borrower shall have paid to the Lender an amount of money equal to the sum due in respect of the call;

		(e) in the case of a capitalisation issue, the relevant Collateral TOGETHER WITH the securities allotted by way of a bonus thereon;

		(f) in the case of a rights issue, the relevant Collateral TOGETHER WITH the securities allotted thereon, PROVIDED THAT the Borrower has given notice to the Lender in accordance with Clause 4(B)(vi), and has paid to the Lender all and any sums due in respect thereof;

		(g) in the event that a payment or delivery of Income is made in respect of the relevant Collateral in the form of securities or a certificate which may at a future date be exchanged for securities or in the event of an option to take Income in the form of securities or a certificate which may at a future date be exchanged for securities, notice has been given to the Borrower in accordance with Clause 4(B)(vi) the relevant Collateral TOGETHER WITH securities or a certificate equivalent to those allotted;

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		(h) in the case of any event similar to any of the foregoing, the relevant Collateral TOGETHER WITH or replaced by a sum of money or securities equivalent to that received in respect of such Collateral resulting from such event;

		For the avoidance of doubt, in the case of Bankers’ Acceptances (Collateral type B(v)), Equivalent Collateral must bear dates, acceptances and endorsements (if any) by the same entities as the bill to which it is intended to be equivalent and for the purposes of this definition, securities are equivalent to other securities where they are of an identical type, nominal value, description and amount and such term shall include the certificate and other documents of or evidencing title and transfer in respect of the foregoing (as appropriate);

“Equivalent Securities”		means securities of an identical type, nominal value, description and amount to particular Securities borrowed and such term shall include the certificates and other documents of or evidencing title and transfer in respect of the foregoing (as appropriate). If and to the extent that such Securities are partly paid or have been converted, subdivided, consolidated, redeemed, made the subject of a takeover, capitalisation issue, rights issue or event similar to any of the foregoing, the expression shall have the following meaning:

		(a) in the case of conversion, subdivision or consolidation the securities into which the borrowed Securities have been converted, subdivided or consolidated PROVIDED THAT if appropriate, notice has been given in accordance with Clause 4(B)(vi);

		(b) in the case of redemption, a sum of money equivalent to the proceeds of the redemption;

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		(c) in the case of takeover, a sum of money or securities, being the consideration or alternative consideration of which the Lender has given notice to the Borrower in accordance with Clause 4(B)(vi);

		(d) in the case of a call on partly paid securities, the paid-up securities PROVIDED THAT the Lender shall have paid to the Borrower an amount of money equal to the sum due in respect of the call;

		(e) in the case of a capitalisation issue, the borrowed Securities TOGETHER WITH the securities allotted by way of a bonus thereon;

		(f) in the case of a rights issue, the borrowed Securities TOGETHER WITH the securities allotted thereon, PROVIDED THAT the Lender has given notice to the Borrower in accordance with Clause 4(B)(vi), and has paid to the Borrower all and any sums due in respect thereof;

		(g) in the event that a payment or delivery of Income is made in respect of the borrowed Securities in the form of securities or a certificate which may at a future date be exchanged for securities or in the event of an option to take Income in the form of securities or a certificate which may at a future date be exchanged for securities, notice has been given to the Borrower in accordance with Clause 4(B)(vi) the borrowed Securities TOGETHER WITH securities or a certificate equivalent to those allotted;

		(h) in the case of any event similar to any of the foregoing, the borrowed Securities TOGETHER WITH or replaced by a sum of money or securities equivalent to that received in respect of such borrowed Securities resulting from such event;

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		For the purposes of this definition, securities are equivalent to other securities where they are of an identical type, nominal value, description and amount and such term shall include the certificate and other documents of or evidencing title and transfer in respect of the foregoing (as appropriate);

“Event of Default”		has the meaning given in Clause 12;

“Income”		any interest, dividends or other distributions of any kind whatsoever with respect to any Securities or Collateral;

“Income Payment Date”,		with respect to any Securities or Collateral means the date on which Income is paid in respect of such Securities or Collateral, or, in the case of registered Securities or Collateral, the date by reference to which particular registered holders are identified as being entitled to payment of Income;

“Lender”		with respect to a particular loan of Securities means the Lender as referred to in Recital 1 of this Agreement;

“Manufactured Dividend”		shall have the meaning given in Clause 4(B)(ii);

“Margin”		shall have the meaning specified in the Schedule hereto;

“Nominee”		means an agent or a nominee appointed by either Party and approved (if appropriate) as such by the Inland Revenue to accept delivery of, hold or deliver Securities, Equivalent Securities, Collateral and/or Equivalent Collateral on its behalf whose appointment has been notified to the other Party;

“Non-Defaulting Party”		shall have the meaning given in Clause 12;

“Offer Price”		in relation to Equivalent Securities or Equivalent Collateral means the best available offer price thereof on the most appropriate market in a standard size;

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“Offer Value”		Subject to Clause 8(E) means:-

		(a) in relation to Collateral equivalent to Collateral types B (ix) and C (more specifically referred to in the Schedule hereto) the Value thereof as calculated in accordance with such Schedule; and

		(b) in relation to Equivalent Securities or Collateral equivalent to all other types of Collateral (more specifically referred to in the Schedule hereto) the amount it would cost to buy such Equivalent Securities or Equivalent Collateral at the Offer Price thereof at such time together with all costs, fees and expenses that would be incurred in connection therewith, calculated on the assumption that the aggregate thereof is the least that could reasonably be expected to be paid in order to carry out the transaction;

“Parties”		means the Lender and the Borrower and “Party” shall be construed accordingly;

“Performance Date”		shall have the meaning given in Clause 8;

“Principal”		shall have the meaning given in Clause 14;

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“Reference Price”		means:

		(a) in relation to the valuation of Securities, Equivalent Securities, Collateral and/or Collateral equivalent to types B (ii), (viii), (xi) and (xii) (more specifically referred to in the Schedule hereto) such price as is equal to the mid market quotation of such Securities, Equivalent Securities, Collateral and/or Equivalent Collateral as derived from a reputable pricing information service (such as the services provided by Reuters, Extel Statistical Services and Telerate) reasonably chosen in good faith by the Lender or if unavailable the market value thereof as derived from the prices or rates bid by a reputable dealer for the relevant instrument reasonably chosen in good faith by the Lender, in each case at Close of Business on the previous Business Day;

		(b) in relation to the valuation of Collateral and/or Collateral equivalent to Collateral types A and B(i) (more specifically referred to in the Schedule hereto), the CGO Reference Price of such Securities, Equivalent Securities, Collateral and/or Equivalent Collateral then current as determined in accordance with the CGO Rules from time to time in force.

		(c) in relation to the valuation of Collateral and/or Collateral equivalent to Collateral types B(iii), (iv), (v), (vi) (vii) and (ix), (more specifically referred to in the Schedule hereto), the market value thereof as derived from the rates bid by Barclays Bank PLC for such instruments or, in the absence of such a bid, the average of the rates bid by two leading market makers for such instruments at Close of Business on the previous Business Day;

“Relevant Payment Date”		shall have the meaning given in Clause 4(B)(i);

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“Rules”		means the rules for the time being of the Stock Exchange (where either Party is a member of the Stock Exchange) and/or any other regulatory authority whose rules and regulations shall from time to time affect the activities of the Parties pursuant to this Agreement including but not limited to the stocklending regulations and guidance notes relating to both stocklending and manufactured interest and dividends for the time being in force of the Commissioners of the Inland Revenue and any associated procedures required pursuant thereto (PROVIDED THAT in an Event of Default, where either Party is a member of the Stock Exchange, the Rules and Regulations of the Stock Exchange shall prevail);

“Securities”		means Overseas Securities as defined in the Income Tax (Stock Lending) Regulations 1989 (S.1. 1989 No. 1299) (as amended by the Income Tax (Stock Lending) (Amendment) Regulations 1990 (S.I. 1990 No. 2552)and 1993 (S.I. 1993 No. 2003)) or any statutory modification or re-enactment thereof for the time being in force which the Borrower is entitled to borrow from the Lender in accordance with the Rules and which are the subject of a loan pursuant to this Agreement and such term shall include the certificates and other documents of title in respect of the foregoing;

“Settlement Bank”		means a settlement member of the CHAPS and Town Clearing systems who has entered into contractual arrangements with the CGO to provide Assured Payment facilities for members of the CGO;

“Settlement Date”		means the date upon which Securities are or are to be transferred to the Borrower in accordance with this Agreement;

“Stock Exchange”		means the London Stock Exchange Limited;

“Value”		at any particular time means in respect of Securities and Equivalent Securities, the Reference Price thereof then current and in respect of Collateral and/or Equivalent Collateral such worth as determined in accordance with the Schedule hereto.

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(B)	All headings appear for convenience only and shall not affect the interpretation hereof.

(C)

Notwithstanding the use of expressions such as “borrow”, “lend”, “Collateral”, “Margin”, “redeliver” etc. which are used to reflect terminology used in the market for transactions of the kind provided for in this Agreement, title to Securities “borrowed” or “lent” and “Collateral” provided in accordance with this Agreement shall pass from one Party to another as provided for in this Agreement, the Party obtaining such title being obliged to redeliver Equivalent Securities or Equivalent Collateral as the case may be.

(D)

For the purposes of Clauses 6(H)-6(K) and 8(C)-8(E) of this Agreement or otherwise where a conversion into the Base Currency is required, all prices, sums or values (including any Value, Offer Value and Bid Value) of Securities, Equivalent Securities, Collateral or Equivalent Collateral (including Cash Collateral) stated in currencies other than the Base Currency shall be converted into the Base Currency at the spot rate of exchange at the relevant time in the London interbank market for the purchase of the Base Currency with the currency concerned.

(E)

Where at any time there is in existence any other agreement between the Parties the terms of which make provision for the lending of Securities (as defined in this Agreement) as well as other securities the terms of this Agreement shall apply to the lending of such Securities to the exclusion of any other such agreement.

2.	LOANS OF SECURITIES

(A)

The Lender will lend Securities to the Borrower, and the Borrower will borrow Securities from the Lender in accordance with the terms and conditions of this Agreement and with the Rules PROVIDED ALWAYS THAT the Lender shall have received from the Borrower and accepted (by whatever means) a Borrowing Request.

(B)

The Borrower has the right to reduce the amount of Securities referred to in a Borrowing Request PROVIDED THAT the Borrower has notified the Lender of such reduction no later than midday London time on the day which is two Business Days prior to the Settlement Date unless otherwise agreed between the Parties and the Lender shall have accepted such reduction (by whatever means).

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3.	DELIVERY OF SECURITIES

The Lender shall procure the delivery of Securities to the Borrower or deliver such Securities in accordance with the relevant Borrowing Request TOGETHER WITH appropriate instruments of transfer duly stamped where necessary and such other instruments as may be requisite to vest title thereto in the Borrower. Such Securities shall be deemed to have been delivered by the Lender to the Borrower on delivery to the Borrower or as it shall direct of the relevant instruments of transfer, or in the case of Securities held by an agent or a clearing or settlement system on the effective instructions to such agent or the operator of such system to hold the Securities absolutely for the Borrower, or by such other means as may be agreed.

4.	RIGHTS AND TITLE

(A)	The Parties shall execute and deliver all necessary documents and give all necessary instructions to procure that all right, title and interest in:

(i) any Securities borrowed pursuant to Clause 2;

(ii) any Equivalent Securities redelivered pursuant to Clause 7;

(iii) any Collateral delivered pursuant to Clause 6;

(iv) any Equivalent Collateral redelivered pursuant to Clauses 6 or 7;

shall pass from one Party to the other subject to the terms and conditions mentioned herein and in accordance with the Rules, on delivery or redelivery of the same in accordance with this Agreement, free from all liens, charges and encumbrances. In the case of Securities, Collateral, Equivalent Securities or Equivalent Collateral title to which is registered in a computer based system which provides for the recording and transfer of title to the same by way of book entries, delivery and transfer of title shall take place in accordance with the rules and procedures of such system as in force from time to time. The Party acquiring such right, title and interest shall have no obligation to return or redeliver any of the assets so acquired but, in so far as any Securities are borrowed or any Collateral is delivered to such Party, such Party shall be obliged, subject to the terms of this Agreement, to redeliver Equivalent Securities or Equivalent Collateral as appropriate.

(B) (i)

Where Income is paid in relation to any Securities on or by reference to an Income Payment Date on which such Securities are the subject of a loan hereunder, the Borrower shall, on the date of the payment of such Income, or on such other date as the Parties may from time to time agree, (the “Relevant Payment Date”) pay and deliver a sum of money or property equivalent to the

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same (with any such endorsements or assignments as shall be customary and appropriate to effect the delivery) to the Lender or its Nominee, irrespective of whether the Borrower received the same. The provisions of sub-paragraphs (ii) to (v) below shall apply in relation thereto.

(ii)

Subject to sub-paragraph (iii) below, in the case of any Income comprising a payment, the amount (the “Manufactured Dividend”) payable by the Borrower shall be equal to the amount of the relevant Income together with an amount equivalent to any deduction, withholding or payment for or on account of tax made by the relevant issuer (or on its behalf) in respect of such Income together with an amount equal to any other tax credit associated with such Income unless a lesser amount is agreed between the Parties or an Appropriate Tax Voucher (together with any further amount which may be agreed between the Parties to be paid) is provided in lieu of such deduction, withholding tax credit or payment.

(iii)

Where either the Borrower, or any person to whom the Borrower has on-lent the Securities, is unable to make payment of the Manufactured Dividend to the Lender without accounting to the Inland Revenue for any amount of relevant tax (as required by Schedule 23A to the Income and Corporation Taxes Act 1988) the Borrower shall pay to the Lender or its Nominee, in cash, the Manufactured Dividend less amounts equal to such tax. The Borrower shall at the same time if requested supply Appropriate Tax Vouchers to the Lender.

(iv)

If at any time any Manufactured Dividend falls to be paid and neither of the Parties is an Approved UK Intermediary or an Approved UK Collecting Agent, the Borrower shall procure that the payment is paid through an Approved UK Intermediary or an Approved UK Collecting Agent agreed by the Parties for this purpose, unless the rate of relevant withholding tax in respect of any Income that would have been payable to the Lender but for the loan of the Securities would have been zero and no income tax liability under Section 123 of the Income and Corporation Taxes Act 1988 would have arisen in respect thereof.

(v)	In the event of the Borrower failing to remit either directly or by its Nominee any sum payable pursuant to this Clause, the Borrower hereby undertakes to pay a rate to the Lender (upon demand) on the amount due and outstanding at

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the rate provided for in Clause 13 hereof. Interest on such sum shall accrue daily commencing on and inclusive of the third Business Day after the Relevant Payment Date, unless otherwise agreed between the Parties.

(vi)

Each Party undertakes that where it holds securities of the same description as any securities borrowed by it or transferred to it by way of collateral at a time when a right to vote arises in respect of such securities, it will use its best endeavours to arrange for the voting rights attached to such securities to be exercised in accordance with the instructions of the Lender or Borrower (as the

case may be) PROVIDED ALWAYS THAT each Party shall use its best endeavours to notify the other of its instructions in writing no later than seven Business Days prior to the date upon which such votes are exercisable or as otherwise agreed between the Parties and that the Party concerned shall not be obliged so to exercise the votes in respect of a number of Securities greater than the number so lent or transferred to it. For the avoidance of doubt the Parties agree that subject as hereinbefore provided any voting rights attaching to the relevant Securities, Equivalent Securities, Collateral and/or Equivalent Collateral shall be exercisable by the persons in whose name they are registered or in the case of Securities, Equivalent Securities, Collateral and/or Equivalent Collateral in bearer form, the persons by or on behalf of whom they are held, and not necessarily by the Borrower or the Lender (as the case may be).

(vii)

Where, in respect of any borrowed Securities or any Collateral, any rights relating to conversion, sub-division, consolidation, pre-emption, rights arising under a takeover offer or other rights, including those requiring election by the holder for the time being of such Securities or Collateral, become exercisable prior to the redelivery of Equivalent Securities or Equivalent Collateral, then the Lender or Borrower, as the case may be, may, within a reasonable time before the latest time for the exercise of the right or option give written notice to the other Party that on redelivery of Equivalent Securities or Equivalent Collateral, as the case may be, it wishes to receive Equivalent Securities or Equivalent Collateral in such form as will arise if the right is exercised or, in the case of a right which may be exercised in more than one manner, is exercised as is specified in such written notice.

(viii)

Any payment to be made by the Borrower under this Clause shall be made in a manner to be agreed between the Parties.

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RATES

(A)	In respect of each loan of Securities, the Borrower shall pay to the Lender, in the manner prescribed in sub-Clause (C), sums calculated by applying such rate as shall be agreed between the Parties from time to time to the daily Value of the relevant Securities.

(B)	Where Cash Collateral is deposited with the Lender in respect of any loan of Securities in circumstances where:

(i)

interest is earned by the Lender in respect of such Cash Collateral and that interest is paid to the Lender without deduction of tax, the Lender shall pay to the Borrower, in the manner prescribed in sub-Clause (C), an amount equal to the gross amount of such interest earned. Any such payment due to the Borrower may be set-off against any payment due to the Lender pursuant to sub-Clause (A) hereof if either the Borrower has warranted to the Lender in this Agreement that it is subject to tax in the United Kingdom under Case I of Schedule D in respect of any income arising pursuant to or in connection with the borrowing of Securities hereunder or the Lender has notified the Borrower of the gross amount of such interest or income; and

(ii)

sub-Clause (B)(i) above does not apply, the Lender shall pay to the Borrower, in the manner presented in sub-Clause (C), sums calculated by applying such rates as shall be agreed between the Parties from time to time to the amount of such Cash Collateral. Any such payment due to the Borrower may be set-off against any payment due to the Lender pursuant to sub-Clause (A) hereof.

(C)

In respect of each loan of Securities, the payments referred to in sub-Clauses (A) and (B) of this Clause shall accrue daily in respect of the period commencing on and inclusive of the Settlement Day and terminating on and exclusive of the Business Day upon which Equivalent Securities are redelivered or Cash Collateral is repaid. Unless otherwise agreed, the sums so accruing in respect of each calendar month shall be paid in arrears by the Borrower to the Lender or to the Borrower by the Lender (as the case may be) not later than the Business Day which is one week after the last Business Day of the calendar month to which such payments relate or such other date as the Parties shall from time to time agree. Any payment made pursuant to sub-Clauses (A) and (B) hereof shall be in such currency and shall be paid in such manner and at such place as shall be agreed between the Parties.

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6.	COLLATERAL

(A)

(i) Subject to sub-Clauses (B), (C) and (E) below the Borrower undertakes to deliver Collateral to the Lender (or in accordance with the Lender’s instructions) TOGETHER WITH appropriate instruments of transfer duly stamped where necessary and such other instruments as may be requisite to vest title thereto in the Lender simultaneously with delivery of the borrowed Securities and in any event no later than Close of Business on the Settlement Date. Collateral may be provided in any of the forms specified in the Schedule hereto (as agreed between the Parties);

(ii) where Collateral is delivered to the Lender’s Nominee any obligation under this Agreement to redeliver or otherwise account for Equivalent Collateral shall be an obligation of the Lender notwithstanding that any such redelivery may be effected in any particular case by the Nominee.

(B)

Where CGO Collateral is provided to the Lender or its Nominee by member-to-member delivery or delivery-by-value in accordance with the provisions of the CGO Rules from time to time in force, the obligation of the Lender shall be to redeliver Equivalent Collateral through the CGO to the Borrower in accordance with this Agreement. Any references, (howsoever expressed) in this Agreement, the Rules, and/or any other agreement or communication between the Parties to an obligation to redeliver such Equivalent Collateral shall be construed accordingly. If the loan of Securities in respect of which such Collateral was provided has not been discharged when the Collateral is redelivered, the Assured Payment obligation generated on such redelivery shall be deemed to constitute a payment of money which shall be treated as Cash Collateral until the loan is discharged, or further Equivalent Collateral is provided later during that Business Day. This procedure shall continue daily where CGO Collateral is delivered-by-value for as long as the relevant loan remains outstanding.

(C)	Where CGO Collateral or other collateral is provided by delivery-by-value to a Lender or its Nominee the Borrower may consolidate such Collateral with other Collateral provided by the same delivery to a third party for whom the Lender or its Nominee is acting.

(D)	Where Collateral is provided by delivery-by-value through an alternative book entry transfer system, not being the CGO, the obligation of the Lender shall be to redeliver Equivalent Collateral through such book entry transfer system in accordance with this Agreement. If the

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loan of Securities in respect of which such Collateral was provided has not been discharged when the Collateral is redelivered, any payment obligation generated within the book entry transfer system on such redelivery shall be deemed to constitute a payment of money which shall be treated as Cash Collateral until the loan is discharged, or further Equivalent Collateral is provided later during that Business Day. This procedure shall continue when Collateral is delivered-by-value for as long as the relevant loan remains outstanding;

(E)

Where Cash Collateral is provided the sum of money so deposited may be adjusted in accordance with Clause 6(H). Subject to Clause 6(H)(ii), the Cash Collateral shall be repaid at the same time as Equivalent Securities in respect of the Securities borrowed are redelivered, and the Borrower shall not assign, charge, dispose of or otherwise deal with its rights in respect of the Cash Collateral. If the Borrower fails to comply with its obligations for such redelivery of Equivalent Securities the Lender shall have the right to apply the Cash Collateral by way of set-off in accordance with Clause 8.

(F)

The Borrower may from time to time call for the repayment of Cash Collateral or the redelivery of Collateral equivalent to any Collateral delivered to the Lender prior to the date on which the same would otherwise have been repayable or redeliverable PROVIDED THAT at the time of such repayment or redelivery the Borrower shall have delivered or delivers Alternative Collateral acceptable to the Lender.

(G) (i)

Where Collateral (other than Cash Collateral) is delivered in respect of which any Income may become payable, the Borrower shall call for the redelivery of Collateral equivalent to such Collateral in good time to ensure that such Equivalent Collateral may be delivered prior to any such Income becoming payable to the Lender, unless in relation to such Collateral the Parties are satisfied before the relevant Collateral is transferred that no tax will be payable to the UK Inland Revenue under Schedule 23A of the Income and Corporation Taxes Act 1988. At the time of such redelivery the Borrower shall deliver Alternative Collateral acceptable to the Lender.

(ii)

Where the Lender receives any Income in circumstances where the Parties are satisfied as set out in Clause 6(G)(i) above, then the Lender shall on the date on which the Lender receives such Income or on such date as the Parties may from time to time agree, pay and deliver a sum of money or property equivalent to such Income (with any such endorsements or assignments as shall be customary and appropriate to effect the delivery) to the Borrower and shall supply Appropriate Tax Vouchers (if any) to the Borrower.

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(H)

Unless the Schedule to this Agreement indicates that Clause 6(I) shall apply in lieu of this Clause 6(H), or unless otherwise agreed between the Parties, the Value of the Collateral delivered to or deposited with the Lender or its nominated bank or depositary (excluding any Collateral repaid or redelivered under sub-Clauses (H)(ii) or (I)(ii) below (as the case may be) (“Posted Collateral”)) in respect of any loan of Securities shall bear from day to day and at any time the same proportion to the Value of the Securities borrowed under such loan as the Posted Collateral bore at the commencement of such loan. Accordingly:

(i)

the Value of the Posted Collateral to be delivered or deposited while the loan of Securities continues shall be equal to the Value of the borrowed Securities and the Margin applicable thereto (the “Required Collateral Value”);

(ii)

if on any Business Day the Value of the Posted Collateral in respect of any loan of Securities exceeds the Required Collateral Value in respect of such loan, the Lender shall (on demand) repay such Cash Collateral and/or redeliver to the Borrower such Equivalent Collateral as will eliminate the excess; and

(iii)

if on any Business Day the Value of the Posted Collateral falls below the Required Collateral Value, the Borrower shall (on demand) provide such further Collateral to the Lender as will eliminate the deficiency.

(I)	Subject to Clause 6(J), unless the Schedule to this Agreement indicates that Clause 6(H) shall apply in lieu of this Clause 6(I), or unless otherwise agreed between the Parties:-

(i)

the aggregate Value of the Posted Collateral in respect of all loans of Securities outstanding under this Agreement shall equal the aggregate of the Required Collateral Values in respect of such loans;

(ii)

if at any time the aggregate Value of the Posted Collateral in respect of all loans of Securities outstanding under this Agreement exceeds the aggregate of the Required Collateral Values in respect of such loans, the Lender shall (on demand) repay such Cash Collateral and/or redeliver to the Borrower such Equivalent Collateral as will eliminate the excess;

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(iii)

if at any time the aggregate Value of the Posted Collateral in respect of all loans of Securities outstanding under this Agreement falls below the aggregate of Required Collateral Values in respect of all such loans, the Borrower shall (on demand) provide such further Collateral to the Lender as will eliminate the deficiency.

(J)

Where Clause 6(I) applies, unless the Schedule to this Agreement indicates that this Clause 6(J) does not apply, if a Party (the “first Party”) would, but for this Clause 6(J), be required under Clause 6(I) to repay Cash Collateral, redeliver Equivalent Securities or provide further Collateral in circumstances where the other Party (the “second Party”) would, but for this Clause 6(J), also be required to repay Cash Collateral or provide or redeliver Equivalent Collateral under Clause 6(I), then the Value of the Cash Collateral or Equivalent Collateral deliverable by the first Party (“X”) shall be set-off against the Value of the Cash Collateral, or Equivalent Collateral or further Collateral deliverable by the second Party (“Y”) and the only obligation of the Parties under Clause 6(I) shall be, where X exceeds Y, an obligation of the first Party, or where Y exceeds X, an obligation of the second Party, to repay Cash Collateral, redeliver Equivalent Collateral or to deliver further Collateral having a Value equal to the difference between X and Y.

(K)

Where Cash Collateral is repaid, Equivalent Collateral is redelivered or further Collateral is provided by a Party under Clause 6(I), the Parties shall agree to which loan or loans of Securities such repayment, redelivery or further provision is to be attributed and failing agreement it shall be attributed, as determined by the Party making such repayment, redelivery or further provision to the earliest outstanding loan and, in the case of a repayment or redelivery up to the point at which the Value of Collateral in respect of such loan is reduced to zero and, in the case of a further provision up to the point at which the Value of the Collateral in respect of such loan equals the Required Collateral Value in respect of such loan, and then to the next earliest outstanding loan up to the similar point and so on.

(L)

Where any Cash Collateral falls to be repaid or Equivalent Collateral to be redelivered or further Collateral to be provided under this Clause 6, it shall be delivered within the minimum period after demand specified in the Schedule or if no appropriate period is there specified within the standard settlement time for delivery of the relevant type of Cash Collateral, Equivalent Collateral or Collateral, as the case may be.

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7.	REDELIVERY OF EQUIVALENT SECURITIES

(A)

The Borrower undertakes to redeliver Equivalent Securities in accordance with this Agreement and the terms of the relevant Borrowing Request. For the avoidance of doubt any reference herein or in any other agreement or communication between the Parties (howsoever expressed) to an obligation to redeliver or account for or act in relation to borrowed Securities shall accordingly be construed as a reference to an obligation to redeliver or account for or act in relation to Equivalent Securities.

(B)

Subject to Clause 8 hereof and the terms of the relevant Borrowing Request the Lender may call for the redelivery of all or any Equivalent Securities at any time by giving notice on any Business Day of not less than the standard settlement time for such Equivalent Securities on the exchange or in the clearing organisation through which the relevant borrowed Securities were originally delivered. The Borrower shall as hereinafter provided redeliver such Equivalent Securities not later than the expiry of such notice in accordance with the Lender’s instructions. Simultaneously with the redelivery of the Equivalent Securities in accordance with such call, the Lender shall (subject to Clause 6(I), if applicable) repay any Cash Collateral and redeliver to the Borrower Collateral equivalent to the Collateral delivered pursuant to Clause 6 in respect of the borrowed Securities. For the avoidance of doubt any reference herein or in any other agreement or communication between the Parties (however expressed) to an obligation to redeliver or account for or act in relation to Collateral shall accordingly be construed as a reference to an obligation to redeliver or account for or act in relation to Equivalent Collateral.

(C)

If the Borrower does not redeliver Equivalent Securities in accordance with such call, the Lender may elect to continue the loan of Securities PROVIDED THAT if the Lender does not elect to continue the loan the Lender may by written notice to the Borrower elect to terminate the relevant loan. Upon the expiry of such notice the provisions of Clauses (8) (B) to (F) shall apply as if upon the expiry of such notice an Event of Default had occurred in relation to the Borrower (who shall thus be the Defaulting Party for the purposes of this Agreement) and as if the relevant loan were the only loan outstanding.

(D)

In the event that as a result of the failure of the Borrower to redeliver Equivalent Securities to the Lender in accordance with this Agreement a “buy-in” is exercised against the Lender then provided that reasonable notice has been given to the Borrower of the likelihood of such a “buy-in”, the Borrower shall account to the Lender for the total costs and expenses reasonably incurred by the Lender as a result of such “buy-in”.

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(E)

Subject to the terms of the relevant Borrowing Request, the Borrower shall be entitled at any time to terminate a particular loan of Securities and to redeliver all and any Equivalent Securities due and outstanding to the Lender in accordance with the Lender’s instructions. The Lender shall accept such redelivery and simultaneously therewith (subject to Clause 6(I) if applicable) shall repay to the Borrower any Cash Collateral or, as the case may be, redeliver Collateral equivalent to the Collateral provided by the Borrower pursuant to Clause 6 in respect thereof.

(F)

Where a TALISMAN short term certificate (as described in paragraph C of the Schedule) is provided by way of Collateral, the obligation to redeliver Equivalent Collateral is satisfied by the redelivery of the certificate to the Borrower or its expiry as provided for in the Rules applying to such certificate.

(G)

Where a Letter of Credit is provided by way of Collateral, the obligation to redeliver Equivalent Collateral is satisfied by the Lender redelivering for cancellation the Letter of Credit so provided, or where the Letter of Credit is provided in respect of more than one loan, by the Lender consenting to a reduction in the value of the Letter of Credit.

8.	SET-OFF ETC.

(A)

On the date and time (the “Performance Date”) that Equivalent Securities are required to be redelivered by the Borrower in accordance with the provisions of this Agreement the Lender shall simultaneously redeliver the Equivalent Collateral and repay any Cash Collateral held (in respect of the Equivalent Securities to be redelivered) to the Borrower. Neither Party shall be obliged to make delivery (or make a payment as the case may be) to the other unless it is satisfied that the other Party will make such delivery (or make an appropriate payment as the case may be) to it simultaneously. If it is not so satisfied (whether because an Event of Default has occurred in respect of the other Party or otherwise) it shall notify the other party and unless that other Party has made arrangements which are sufficient to assure full delivery (or the appropriate payment as the case may be) to the notifying Party, the notifying Party shall (provided it is itself in a position, and willing, to perform its own obligations) be entitled to withhold delivery (or payment, as the case may be) to the other Party.

(B)

If an Event of Default occurs in relation to either Party, the Parties’ delivery and payment obligations (and any other obligations they have under this Agreement) shall be accelerated so as to require performance thereof at the time such Event of Default occurs (the date of which shall be the “Performance Date” for the purposes of this clause) and in such event:

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(i)

the Relevant Value of the Securities to be delivered (or payment to be made, as the case may be) by each Party shall be established in accordance with Clause 8(C); and

(ii)

on the basis of the Relevant Values so established, an account shall be taken (as at the Performance Date) of what is due from each Party to the other and (on the basis that each Party’s claim against the other in respect of delivery of Equivalent Securities or Equivalent Collateral or any cash payment equals the Relevant Value thereof) the sums due from one Party shall be set-off against the sums due from the other and only the balance of the account shall be payable (by the Party having the claim valued at the lower amount pursuant to the foregoing) and such balance shall be payable on the Performance Date.

(C)	For the purposes of Clause 8(B) the Relevant Value:-

(i)

of any cash payment obligation shall equal its par value (disregarding any amount taken into account under (ii) or (iii) below);

(ii)

of any securities to be delivered by the Defaulting Party shall, subject to Clause 8(E) below, equal the Offer Value thereof; and

(iii)

of any securities to be delivered to the Defaulting Party shall, subject to Clause 8(E) below, equal the Bid Value thereof.

(D)

For the purposes of Clause 8(C), but subject to Clause 8(E) below, the Bid Value and Offer Value of any securities shall be calculated as at the Close of Business in the most appropriate market for securities of the relevant description (as determined by the Non-Defaulting Party) on the first Business Day following the Performance Date, or if the relevant Event of Default occurs outside the normal business hours of such market, on the second Business Day following the Performance Date (the “Default Valuation Time”);

(E)

(i) Where the Non-Defaulting Party has following the occurrence of an Event of Default but prior to the Default Valuation Time purchased securities forming part of the same issue and being of an identical type and description to those to be delivered by the Defaulting Party and in substantially the same amount as those securities or sold securities forming part of the same issue and being of an identical type and description to those to be delivered by him to the Defaulting Party and in substantially the same amount as those securities, the cost of such purchase or the proceeds of such sale, as the case may be, (taking into account all reasonable costs, fees and expenses that would be incurred in connection therewith) shall be treated as the Offer Value or Bid Value, as the case may be, of the relevant securities for the purposes of this Clause 8.

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(ii)

Where the amount of any securities sold or purchased as mentioned in (E)(i) above is not in substantially the same amount as those securities to be valued for the purposes Clause 8(C) the Offer Value or the Bid Value (as the case may be) of those securities shall be ascertained by dividing the net proceeds of sale or cost of purchase by the amount of the securities sold or purchased so as to obtain a net unit price and multiplying that net unit price by the amount of the securities to be valued.

(F)	Any reference in this Clause 8 to securities shall include any asset other than cash provided by way of Collateral.

(G)

If the Borrower or the Lender for any reason fail to comply with their respective obligations under Clauses 6(F) or 6(G) in respect of redelivery of Equivalent Collateral or repayment of Cash Collateral such failure shall be an Event of Default for the purposes of this Clause 8, and the person failing to comply shall thus be the Defaulting Party.

(H)

Subject to and without prejudice to its rights under Clause 8(A) either Party may from time to time in accordance with market practice and in recognition of the practical difficulties in arranging simultaneous delivery of Securities, Collateral and cash transfers waive its right under this Agreement in respect of simultaneous delivery and/or payment PROVIDED THAT no such waiver in respect of one transaction shall bind it in respect of any other transaction.

TAXATION

(A)

The Borrower hereby undertakes promptly to pay and account for any transfer or similar duties or taxes chargeable in connection with any transaction effected pursuant to or contemplated by this Agreement, and shall indemnify and keep indemnified the Lender against any liability arising in respect thereof as a result of the Borrower’s failure to do so.

(B)

The Borrower shall only make a Borrowing Request where the purpose of the loan meets the requirements of the Rules regarding the conditions that must be fulfilled for Section 129 of the Income and Corporation Taxes Act 1988 (or any statutory modification or re-enactment thereof for the time being in force) to apply to the arrangement concerning the loan, unless the Lender is aware that the transaction is unapproved for the purposes of the Rules of the UK Inland Revenue or such purpose is not met.

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(C)	A Party undertakes to notify the other Party if it becomes or ceases to be an Approved UK Intermediary or an Approved UK Collecting Agent.

10.	LENDER’S WARRANTIES

Each Party hereby warrants and undertakes to the other on a continuing basis to the intent that such warranties shall survive the completion of any transaction contemplated herein that, where acting as a Lender:

(A)	it is duly authorised and empowered to perform its duties and obligations under this Agreement;

(B)	it is not restricted under the terms of its constitution or in any other manner from

lending Securities in accordance with this Agreement or from otherwise performing its obligations hereunder;

(C)	it is absolutely entitled to pass full legal and beneficial ownership of all Securities provided by it hereunder to the Borrower free from all liens, charges and encumbrances;

(D)

where the Schedule to this Agreement specifies that this Clause 10(D) applies, it is not resident in the United Kingdom for tax purposes and either is not carrying on a trade in the United Kingdom through a branch or agency or if it is carrying on such a trade the loan is not entered into in the course of the business of such branch or agency, and it has (i) delivered or caused to be delivered to the Borrower a duly completed and certified Certificate (MOD2) or a photocopy thereof bearing an Inland Revenue acknowledgement and unique number and such Certificate or photocopy remains valid or (ii) has taken all necessary steps to enable a specific authorisation to make gross payment of the Manufactured Dividend to be issued by the Inland Revenue;

11.	BORROWER’S WARRANTIES

(A)	it has all necessary licenses and approvals, and is duly authorised and empowered, to perform its duties and obligations under this Agreement and will do nothing prejudicial to the continuation of such authorisation, licences or approvals;

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(B)	it is not restricted under the terms of its constitution or in any other manner from borrowing Securities in accordance with this Agreement or from otherwise performing its obligations hereunder;

(C)	it is absolutely entitled to pass full legal and beneficial ownership of all Collateral provided by it hereunder to the Lender free from all liens, charges and encumbrances;

(D)	it is acting as principal in respect of this Agreement;

(E)	where the Schedule to this Agreement specifies this Clause 11(E) applies, it is subject to tax in the United Kingdom under Case I of Schedule D in respect of any income arising pursuant to or in connection with the borrowing of Securities hereunder.

12.	EVENTS OF DEFAULT

Each of the following events occurring in relation to either Party (the “Defaulting Party”, the other Party being the “Non-Defaulting Party”) shall be an Event of Default for the purpose of Clause 8:-

(A)	the Borrower or Lender failing to pay or repay Cash Collateral or deliver or redeliver Collateral or Equivalent Collateral upon the due date, and the Non-Defaulting Party serves written notice on the Defaulting Party;

(B)	the Lender or Borrower failing to comply with its obligations under Clause 6, and the Non- Defaulting Party serves written notice on the Defaulting Party;

(C)	the Borrower failing to comply with Clause 4(B)(i), (ii) or (iii) hereof, and the Non-Defaulting Party serves written notice on the Defaulting Party;

(D)

an Act of Insolvency occurring with respect to the Lender or the Borrower and (except in the case of an Act of Insolvency which is the presentation of a petition for winding up or any analogous proceeding or the appointment of a liquidator or analogous officer of the Defaulting Party in which case no such notice shall be required) the Non-Defaulting Party serves written notice on the Defaulting Party;

(E)	any representations or warranties made by the Lender or the Borrower being incorrect or untrue in any material respect when made or repeated or deemed to have been made or repeated, and the Non-Defaulting Party serves written notice on the Defaulting Party;

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(F)	the Lender or the Borrower admitting to the other that it is unable to, or it intends not to, perform any of its obligations hereunder and/or in respect of any loan hereunder, and the Non-Defaulting Party serves written notice on the Defaulting Party;

(G)

the Lender (if appropriate) or the Borrower being declared in default by the appropriate authority under the Rules or being suspended or expelled from membership of or participation in any securities exchange or association or other self-regulatory organisation, or suspended from dealing in securities by any government agency, and the Non-Defaulting Party serves written notice on the Defaulting Party;

(H)

any of the assets of the Lender or the Borrower or the assets of investors held by or to the order of the Lender or the Borrower being transferred or ordered to be transferred to a trustee by a regulatory authority pursuant to any securities regulating legislation and the Non-Defaulting Party serves written notice on the Defaulting Party, or

(I)

the Lender or the Borrower failing to perform any other of its obligations hereunder and not remedying such failure within 30 days after the Non-Defaulting Party serves written notice requiring it to remedy such failure, and the Non-Defaulting Party serves a further written notice on the Defaulting Party.

Each Party shall notify the other if an Event of Default occurs in relation to it.

13.	OUTSTANDING PAYMENTS

In the event of either Party failing to remit either directly or by its Nominee sums in accordance with this Agreement such Party hereby undertakes to pay a rate to the other Party upon demand on the net balance due and outstanding of 1% above the Barclays Bank PLC base rate from time to time in force.

14.	TRANSACTIONS ENTERED INTO AS AGENT

(A)

Subject to the following provisions of this Clause, the Lender may enter into loans as agent (in such capacity, the “Agent”) for a third person (a “Principal”), whether as custodian or investment manager or otherwise (a loan so entered into being referred to in this clause as an “Agency Transaction”).

(B)	A Lender may enter into an Agency Transaction if, but only if:-

(i)

if specifies that loan as an Agency Transaction at the time when it enters into it;

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(ii)

it enters into that loan on behalf of a single Principal whose identity is disclosed to the Borrower (whether by name or by reference to a code or identifier which the Parties have agreed will be used to refer to a specified Principal) at the time when it enters into the loan; and

(iii)

it has at the time when the loan is entered into actual authority to enter into the loan and to perform on behalf of that Principal all of that Principal’s obligations under the agreement referred to in (D)(ii) below.

(C)	The Lender undertakes that, if it enters as agent into an Agency Transaction, forthwith upon becoming aware:-

(i)

of any event which constitutes an Act of Insolvency with respect to the relevant Principal; or

(ii)

of any breach of any of the warranties given in Clause 14(E) below or of any event or circumstance which has the result that any such warranty would be untrue if repeated by reference to the current facts;

it will inform the Borrower of that fact and will, if so required by the Borrower, furnish it with such additional information as it may reasonably request.

(D) i)

Each Agency Transaction shall be a transaction between the relevant Principal and the Borrower and no person other than the relevant Principal and the Borrower shall be a party to or have any rights or obligations under an Agency Transaction. Without limiting the foregoing, the Lender shall not be liable as principal for the performance of an Agency Transaction or for breach of any warranty contained in Clause 10(D) or 11(E) of this Agreement, but this is without prejudice to any liability of the Lender under any other provision of this Clause.

(ii)

All the provisions of the Agreement shall apply separately as between the Borrower and each Principal for whom the Agent has entered into an Agency transaction or Agency Transactions as if each such Principal were a party to a separate agreement with the Borrower in all respects identical with this Agreement other than this paragraph and as if the Principal were Lender in respect of that agreement.

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PROVIDED THAT

if there occurs in relation to the Agent an Event of Default or an event which would constitute an Event of Default if the Borrower served written notice under any sub-Clause of Clause 12, the Borrower shall be entitled by giving written notice to the Principal (which notice shall be validly given if given to the Lender in accordance with Clause 20) to declare that by reason of that event an Event of Default is to be treated as occurring in relation to the Principal. If the Borrower gives such a notice then an Event of Default shall be treated as occurring in relation to the Principal at the time when the notice is deemed to be given; and

if the Principal is neither incorporated nor has established a place of business in Great Britain, the Principal shall for the purposes of the agreement referred to in (D)(ii) be deemed to have appointed as its agent to receive on its behalf service of process in the courts of England the Agent, or if the Agent is neither incorporated nor has established a place of business in the United Kingdom, the person appointed by the Agent for the purposes of this Agreement, or such other person as the Principal may from time to time specify in a written notice given to the other party.

(iii) The foregoing provisions of this Clause do not affect the operation of the Agreement as between the Borrower and the Lender in respect of any transactions into which the Lender may enter on its own account as principal.

(E)

The Lender warrants to the Borrower that it will, on every occasion on which it enters or purports to enter into a transaction as an Agency Transaction, have been duly authorised to enter into that loan and perform the obligations arising thereunder on behalf of the person whom it specifies as the principal in respect of that transaction and to perform on behalf of that person all the obligations of that person under the agreement referred to in (D)(ii).

15.	TERMINATION OF COURSE OF DEALINGS BY NOTICE

Each Party shall have the right to bring the course of dealing contemplated under this Agreement to an end by giving not less than 15 Business Days’ notice in writing to the other Party (which notice shall specify the date of termination) subject to an obligation to ensure that all loans and which have been entered into but not discharged at the time such notice is given are duly discharged in accordance with this Agreement and with the Rules.

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16.	GOVERNING PRACTICES

The Borrower shall use its best endeavours to notify the Lender (in writing) of any changes in legislation or practices governing or affecting the Lender’s rights or obligations under this Agreement or the treatment of transactions effected pursuant to or contemplated by this Agreement.

17.	OBSERVANCE OF PROCEDURES

Each of the Parties hereto agrees that in taking any action that may be required in accordance with this Agreement it shall observe strictly the procedures and timetable applied by the Rules and, further, shall observe strictly any agreement (oral or otherwise) as to the time for delivery or redelivery of any money, Securities, Equivalent Securities, Collateral or Equivalent Collateral entered into pursuant to this Agreement.

18.

SEVERANCE

If any provision of this Agreement is declared by any judicial or other competent authority to be void or otherwise unenforceable, that provision shall be severed from the Agreement and the remaining provisions of this Agreement shall remain in full force and effect. The Agreement shall, however, thereafter be amended by the Parties in such reasonable manner so as to achieve, without illegality, the intention of the Parties with respect to that severed provision.

19.	SPECIFIC PERFORMANCE

Each Party agrees that in relation to legal proceedings it will not seek specific performance of the other Party’s obligation to deliver or redeliver Securities, Equivalent Securities, Collateral or Equivalent Collateral but without prejudice to any other rights it may have.

20.

NOTICES

All notices issued under this Agreement shall be in writing (which shall include telex or facsimile messages) and shall be deemed validly delivered if sent by prepaid first class post to or left at the addresses or sent to the telex or facsimile number of the Parties respectively or such other addresses or telex or facsimile numbers as each Party may notify in writing to the other.

21.	ASSIGNMENT

Neither Party may charge assign or transfer all or any of its rights or obligations hereunder without the prior consent of the other Party.

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22.	NON-WAIVER

No failure or delay by either Party to exercise any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise of any right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege as herein provided.

23.	ARBITRATION AND JURISDICTION

(A)

All claims, disputes and matters of conflict between the Parties arising hereunder shall be referred to or submitted for arbitration in London in accordance with English Law before a sole arbitrator to be agreed between the Parties or in default of agreement by an arbitrator to be nominated by the Chairman of The Stock Exchange on the application of either Party, and this Agreement shall be deemed for this purpose to be a submission to arbitration within the Arbitration Acts 1950 and 1979, or any statutory modification or re-enactment thereof for the time being in force.

(B)	This Clause shall take effect notwithstanding the frustration or other termination of this Agreement.

(C)	No action shall be brought upon any issue between the Parties under or in connection with this Agreement until the same has been submitted to arbitration pursuant hereto and an award made.

24.

TIME

Time shall be of the essence of the Agreement.

25.

RECORDING

The Parties agree that each may electronically record all telephonic conversations between them.

26.	GOVERNING LAW

This Agreement is governed by, and shall be construed in accordance with, English Law.

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IN WITNESS WHEREOF this Agreement has been executed on behalf of the Parties hereto the day and year first before written.


SIGNED BY		)
		)
		)
ON BEHALF OF		)
JPMorgan Chase Bank		)
(London branch) )		)
IN THE PRESENCE OF:		)

SIGNED BY		)
		)
		)
ON BEHALF OF		)
[Insert name of Borrower]
IN THE PRESENCE OF:		)

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SCHEDULE

COLLATERAL

Types

Collateral acceptable under this Agreement may include the following or otherwise, as agreed between the Parties from time to time whether transferable by hand or within a depositary:-

A.	British Government Stock and other stock registered at the Bank of England which is transferable through the CGO to the Lender or its Nominee against an Assured Payment, hereinbefore referred to as CGO Collateral.

B. (i)

British Government Stock and Sterling Issues by foreign governments (transferable through the CGO), in the form of an enfaced transfer deed or a long term collateral certificate or overnight collateral chit issued by the CGO accompanied (in each case) by an executed unenfaced transfer deed;

(ii)

Corporation and Commonwealth Stock in the form of registered stock or allotment letters duly renounced;

(iii)

UK Government Treasury Bills;

(iv)

U.S. Government Treasury Bills;

(v)

Bankers’ Acceptances;

(vi)

Sterling Certificates of Deposit;

(vii)

Foreign Currency Certificates of Deposit;

(viii)

Local Authority Bonds;

(ix)

Local Authority Bills;

(x)

Letters of Credit;

(xi)

Bonds or Equities in registrable form or allotment letters duly renounced;

(xii)

Bonds or Equities in bearer form.

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C.	Unexpired TALISMAN short-term certificates issued by The Stock Exchange; and

D.	Cash Collateral.

Valuation of Collateral

Collateral provided in accordance with this Agreement shall be evaluated by reference to the following, or by such means as the Parties may from time to time agree:-

(A)	in respect of Collateral types A(i) and B(i), the current CGO value calculated by reference to the middle market price of each stock as determined daily by the Bank of England, adjusted to include the accumulated interest thereon (the CGO Reference Price);

(B)	in respect of Collateral types B(ii) to (ix), (xi) and (xii) the Reference Price thereof;

(C)	in respect of Collateral types B(x) and C the value specified therein.

Margin

The Value of the Collateral delivered pursuant to Clause 6 by the Borrower to the Lender under the terms and conditions of this Agreement shall on each Business Day represent not less than the Value of the borrowed Securities TOGETHER WITH the following additional percentages hereinbefore referred to as (“the Margin”) unless otherwise agreed between the Parties:-

(i)

in the case of Collateral types B(i) to (x) and D: %, (for Certificates of Deposit the Margin shall be the accumulated interest thereon); or

(ii)

in the case of Collateral types B(xi), (xii) and C : %

If the Value of the borrowed Securities includes any margin over the mid market price of the borrowed Securities this shall be taken into account in determining the Margin applicable.

Basis of Margin Maintenance

Clause 6(H) (transaction by transaction margining)*/Clause 6 (I)(global margining)* shall apply.

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Clause 6(J) (netting of margin where one party both a Borrower and Lender) shall/shall not* apply,

Minimum period after demand for transferring Cash Collateral or Equivalent Collateral:

BASE CURRENCY

The Base Currency applicable to this Agreement is

LENDER’S WARRANTIES

Clause 10(D) shall/shall not* apply.

BORROWER’S WARRANTIES

Clause 11/(E) shall/shall not* apply.

[NB* Delete as appropriate.]

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JPMORGAN OVERSEAS SECURITIES LENDER’S AGREEMENT

APPENDIX

The terms of this Appendix amend various of the provisions of the Overseas Securities Lender’s Agreement entered into between the Parties (the “Agreement”).

This Appendix supplements and forms part of the Agreement and accordingly the Appendix and Agreement shall be treated as one single agreement between the Parties.

Capitalised words in this Appendix bear the same meaning (save as otherwise amended herein) as in the Agreement.

1.	Recital 1 on page 1 shall be replaced with the following:-

“From time to time the Parties hereto may enter into transactions in which one Party (the “Lender”) agrees to lend to the other (the “Borrower” ) from time to time Securities (as hereinafter defined), subject to any Inland Revenue provisions then in force.”

2.	The following shall be inserted as Recital 3:-

“The Lender shall enter into loans of Securities as agent on behalf of third party beneficial owners and Clause 14 shall take effect in accordance therewith.

3.	In the definitions of “Approved UK Collecting Agent” and “Approved UK Intermediary”, the words “interest and” shall be deleted, and the word “overseas” substituted.

4.	The definition of “Collateral” shall be replaced with the following:-

“

“Collateral” shall mean, collectively, all cash, Approved Securities and Letters of Credit from time to time paid or delivered by the Borrower to the Lender pursuant to Clause 6 and shall include the certificates and other documents of or evidencing title and transfer with respect to the foregoing (as appropriate) and shall include Alternative Collateral. For the purposes of this definition a Letter of Credit shall mean an irrevocable letter of credit issued by a bank acceptable to the Lender for the account of the Borrower or any other person acceptable to the Lender and which contains such terms and provisions as are required by or acceptable to the Lender in its discretion. Approved Securities shall mean securities of such class or classes falling within section (i) of the list of types of collateral in the Schedule hereto but only in so far as any such class has been designated by notice in writing given by the Lender to the Borrower from time to time hereafter as capable of being Approved Securities for the purposes of this Agreement and which are acceptable to the Lender for the purposes hereof in its sole discretion and such term shall include the certificates and other documents of or evidencing title and transfer with respect to such securities.”

5.	In the definitions of “Equivalent Collateral” and “Equivalent Securities”, the references to Clause 4(B)(vi) shall be replaced with references to Clause 4(B)(vii).

6.	The definition of “Securities” shall be replaced with the following:-

“

“Securities” means Overseas Securities as defined in paragraph 1(1) of Schedule 23A to the Income and Corporation Taxes Act 1988 which the Borrower is entitled to borrow from the Lender in accordance with the Rules and which are the subject of a loan pursuant to this Agreement and such term shall include the certificates and other documents of title in respect of the foregoing.”

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7.	The following definitions shall be added to Clause 1 of the Agreement:-

“Relevant Bank” shall mean, with respect to any loan, a bank which has issued a Letter of Credit which, or a portion of which, is for the time being allocated as Collateral for such loan;

“Relevant Organisation” shall mean any governmental agency, bureau, commission or department and any self-regulatory or other organisation concerned with dealings, and any association of dealers, in securities of any description;

8.	A new Clause 1(F) shall be added as follows:

“(F)

Any reference in this Agreement to an act, regulation or other legislation hereunder shall include a reference to any statutory modification or re-enactment thereof for the time being in force.”

9.	The existing wording of Clause 4(B)(iv) shall be deleted and the following substituted:

“(iv)

Unless otherwise agreed between the Parties as indicated in the Schedule to this Agreement, if any time any Manufactured Dividend falls to be paid and neither of the Parties is an Approved UK Intermediary or an Approved UK Collecting Agent, the Borrower shall procure that the payment is paid through an Approved UK Intermediary or an Approved UK Collecting Agent agreed by the Parties for this purpose, unless the rate of relevant withholding tax in respect of any Income that would have been payable to the Lender but for the loan of the Securities would have been zero and no income tax liability under Chapter VIIA of Part IV of the Income and Corporation Taxes Act 1988 would have arisen in respect thereof.”

10.	Clause 4(B)(viii) shall be replaced by the following provisions (which shall take effect as sub-clauses (viii), (ix) and (x) respectively) and existing sub-clause (viii) of the Agreement shall be renumbered as sub-clause (xi):-

“(viii) any distribution of securities made in exchange for loaned Securities shall be considered as substituted for such loaned Securities and need not be delivered to the Lender until the relevant loan of Securities is terminated hereunder;

(ix) any distribution solely in the form of securities with respect to any loaned Securities shall be added to such loaned Securities (and shall constitute loaned Securities, and be part of the relevant loan of Securities, for all purposes hereof) and need not be delivered to the Lender until the relevant loan of securities is terminated hereunder, if at or before the making of such distribution the Borrower shall have delivered such additional Collateral for the relevant loan to the Lender for the account of the relevant Principal as shall be necessary to make the aggregate Value of the Collateral for such loan, determined on the date of such distribution, at least equal to the Value of the loaned Securities plus the Margin with respect to such loan (after giving effect to the addition of the securities being distributed) determined on such date; and

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(x) any distributions of warrants or rights to purchase shares made with respect to any loaned securities shall be deemed to be, and shall be, a new loan of securities made to the Borrower by the Principal which loaned to the Borrower the loaned securities with respect to which such distribution is made (and shall be treated as loaned Securities, and as a separate loan, for all purposes hereof) and need not be delivered to the Lender until such new loan is terminated in accordance herewith, if at or before the making of such distribution the Borrower and the Lender shall have agreed upon the Margin for such new loan and the Borrower shall have delivered to the Lender Collateral for such new loan having a acceptable to the Lender.

11.	The following shall be substituted for Clause 6(A)(i):-

“(A)(i) Unless the Parties agree otherwise and subject to sub-clauses (B), (C) and (E) below the Borrower agrees that, as a condition precedent to the making of any loan, it shall deliver Collateral to the Lender (or in accordance with the Lender’s instructions) TOGETHER WITH appropriate instruments of transfer duly stamped where necessary and such other instruments as may be requisite to vest title thereto in the Lender.”

12.	The words commencing “...unless in relation to...” in the fifth line down in Clause 6(G)(i) to the end of that clause shall be deleted and the whole of Clause 6(G)(ii) shall be deleted.

13.	In Clause 6(K), the reference to Clause 6(I) shall be replaced by a reference to Clause 6(H).

14.	The following shall be inserted as Clause 6(M):-

“(M) The delivery of a Letter of Credit shall be effected for the purposes of this Agreement by physical delivery of the original executed Letter of Credit by the issuing, confirming or advising bank to the Lender at its address for delivery of notices or as the Lender may otherwise agree, provided, however, that no such delivery shall be effective until one Business Day after the receipt of a Letter of Credit by the Lender (or, if the relevant Letter of Credit is received by the Lender prior to 3 p.m. (London time) on a Business Day, until 5.30 p.m. (London time) on such Business Day), during which period the Lender may reject such Letter of Credit, by oral notice to the Borrower, if such Letter of Credit is not in the form required by or acceptable to the Lender.”

15.	Clause 7B shall be amended as follows:-

(i) by the insertion of the following words at the end of the first sentence:-

“(and

where there is a difference between the settlement time for sales and purchases on the relevant exchange or clearing organisation, the standard settlement time shall be the shorter of the two times).”

(ii)

in the third sentence, by the insertion of the following words after “Simultaneously with the redelivery of the Equivalent Securities in accordance with such call,”:-

“or at such other time as may be agreed by the Parties,”

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16.	The requirements pursuant to Clause 9(B) shall not apply as between the Parties.

17.	The following shall be inserted as Clause 11(F):-

“(F)

The Borrower has heretofore delivered to the Lender a copy of the annual [consolidated] financial statements of the Borrower [and its consolidated subsidiaries] for its [fiscal/financial] year ended [ ], 19[ ] duly audited by independent [certified public accountants/internationally recognised auditors], including a balance sheet as at the end of such [fiscal/financial] year [and the related statement of income and changes in financial position for such fiscal year], and a copy of the unaudited [consolidated] financial statements of the Borrower [and its consolidated subsidiaries] for the [ ] month period ended [ ], 19[ ] including a balance sheet as at the end of such period [and the related statement of income and changes in financial position for such period], and each of the said statements and related notes thereto are complete and correct and fairly present the [consolidated] financial condition and results of operation of the Borrower [and its consolidated subsidiaries] as at the said dates and for such periods, all in conformity with generally accepted accounting principles consistently applied;”

18.	The following shall be inserted as Clause 11(G):-

“(G) it is an Approved Intermediary.”

19.	Clause 12 shall be amended as follows:-

(i)

by the deletion of “or” at the end of sub-clause (H);

(ii)

in sub-clause (I) by the deletion of all the words after “hereunder” and the substitution therefor of “and the Non-Defaulting Party serves written notice on the Defaulting Party”;

(iii)

by the addition of the following sub-clauses:-

“(J)

a violation by the Borrower in connection with any Securities the subject of a loan hereunder or the holding or disposition thereof by the Borrower, of any applicable law, regulation or rule of any jurisdiction, or of any Relevant Organisation to the requirements of which the Borrower may be subject;

(K)

the occurrence of any other event which the Borrower is required to notify to the Lender pursuant to Clause 27(B) hereof; or

(L)

an Act of Insolvency occurring with respect to any Relevant Bank and (except in the case of an Act of Insolvency which is the presentation of a petition for winding up or any analogous proceeding in relation to the Relevant Bank in which case no such notice shall be required) the Lender serves written notice on the Borrower.”

20.	The following shall take effect as Clause 27 of the Agreement:-

“Covenants of the Borrower:

The Borrower hereby covenants and agrees with the Lender as follows:

(A)

The Borrower will furnish to the Lender (i) as soon as available and in any event within [ ] days after the end of each of its [fiscal/financial] years, a copy of the annual [consolidated] financial statements of the Borrower [and its consolidated subsidiaries] duly audited by independent [certified public

- 41 -

accountants/internationally recognised auditors], including a balance sheet as at the end of such [fiscal/financial] year [and the related statement of income and changes in financial position for such fiscal year], prepared in accordance with generally accepted accounting principles consistently applied, (ii) as soon as available and in any event within [ ] days after the end of each of the first three quarters of each of its [fiscal/financial] years, a copy of the [consolidated] financial statements of the Borrower [and its consolidated subsidiaries] for the period then ended, including a balance sheet as at the end of such period [and the related statement of income and changes in financial position for such period], prepared in accordance with generally accepted accounting principles on a basis consistent with that used in the preparation of the financial statements referred to in sub-paragraph (i) above and certified by an appropriate officer of the Borrower, (iii) promptly after the occurrence of any default under this Agreement, a written notice setting forth the nature of such default and the steps being taken by the Borrower to remedy such default, and (iv) from time to time such further information (whether or not of the kind mentioned above) regarding the business, affairs and financial condition of the Borrower as the Lender may reasonably request.

(B) The Borrower will give the Lender immediate notice if at any time any order, decree, determination or instruction is issued on the authority of any rule, regulation or proceeding of any Relevant Organisation in relation to the Borrower, or any litigation, arbitration or similar proceeding against or affecting the Borrower is commenced, which in any such case could have a material adverse effect on the ability of the Borrower to perform its obligations under this Agreement or to carry on its business as conducted as at the date of this Agreement or which might adversely affect the borrowing of securities by the Borrower. Any such notice shall set forth in reasonable detail a description of the event which has occurred and of the action, if any which the Borrower proposes to take with respect thereto.”

21.	The Schedule shall be deleted and replaced by the following:-

“Types

The following types of collateral shall unless otherwise agreed constitute Collateral acceptable under this Agreement;

(i)

US Government securities which shall mean book-entry securities issued by the U.S. Treasury (as defined in Subpart O of Treasury Department Circular No. 300 and any successor provisions) and any other securities issued or fully guaranteed by the United States government or any agent, instrumentality or establishment of the U.S. government, including without limitation, securities commonly known as “Ginnie Maes”, “Sally Maes” and “Freddie Maes”.

(ii)

Letters of Credit;

(iii)

Cash Collateral.

Valuation of Collateral

Collateral provided in accordance with this Agreement shall be evaluated by reference to the following, or by such means as the Parties may from time to time agree:-

- 42 -

(a) in respect of Collateral type (i) above, the Reference Price thereof;

(b) in respect of Collateral type (ii) above, the value specified therein.

Margin

“The Value of the Collateral delivered pursuant to Clause 6 by the Borrower to the Lender under the terms and conditions of this Agreement shall on each Business Day represent not less than 100% of the Value of the borrowed Securities, and otherwise as agreed between the Parties with respect to each loan”.

Basis of Margin Maintenance

“Clause 6(H) (transaction by transaction margining) shall apply in lieu of Clause 6(I); however, the Lender shall have the right at its sole election, at any time from time to time, to allocate and/or reallocate any Collateral held by it hereunder to or among any outstanding loans.

Clause 6(J) (netting of Margin where one party both a Borrower and Lender) shall apply, notwithstanding that Clause 6(I) does not apply.

The minimum period after demand for transferring Cash Collateral or Equivalent Collateral shall be the same Business Day if demand is made before 11.00 am, and otherwise as agreed between the parties”.

Base Currency

The Base Currency applicable to this Agreement is United States Dollars (US$).

Lenders’ Warranties

Clause 10(D) shall apply.

Borrowers’ Warranties

Clause 11(E) shall apply.

- 43 -

Appendix 6

Global Securities Lending

Fee Schedule

In connection with Loans hereunder, Bank shall be paid by Lender, monthly in arrears a fee of: (i) 6 basis points (.06 of 1%), calculated on an annualized basis and accrued daily, based upon the value of Collateral received from Borrowers for each Loan of U.S. Securities outstanding during a given month under this Lending Agreement; and (ii) 11.42 basis points (.1142 of 1%), calculated on an annualized basis and accrued daily, based upon the value of Collateral received from Borrowers for each Loan of non-U.S. Securities outstanding during a given month under this Lending Agreement; provided that, until further notice from Bank, commencing on the date of the Lending Agreement and continuing until the giving of such notice, the forgoing fees have been voluntarily reduced by Bank to: (i) 5 basis points (.05 of 1%) for each Loan of U.S. Securities and (ii) 10 basis points (.1 of 1%) for each Loan of non-U.S. Securities, respectively.

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