Unassociated Document

                                TDAX FUNDS, INC.




                   TDAX Independence 2010 Exchange-Traded Fund
                   TDAX Independence 2020 Exchange-Traded Fund
                   TDAX Independence 2030 Exchange-Traded Fund
                   TDAX Independence 2040 Exchange-Traded Fund
                TDAX Independence In-Target Exchange-Traded Fund



                       Statement of Additional Information


                               September 26, 2007



This Statement of Additional Information, which is not a prospectus, contains
additional information about TDAX Funds, Inc. (the "Company"). This Statement of
Additional Information should be read in conjunction with the Company's current
Prospectus, dated September 26, 2007, as it may be revised from time to time.
Capitalized terms used herein that are not defined have the same meaning
ascribed to them as in the Prospectus.

The audited statements of assets and liabilities and related report of Eisner
LLP, the Company's independent registered public accounting firm, are included
herein. A copy of the Prospectus may be obtained without charge, by contacting
the Company's Distributor, ALPS Distributors, Inc. 1290 Broadway, Suite 1100,
Denver, Colorado, 80203.



                                      B-1




                                TABLE OF CONTENTS



I.      GENERAL INFORMATION ABOUT THE COMPANY...............................B-3

II.     INVESTMENT POLICIES AND RELATED RISKS...............................B-3

III.    FUNDAMENTAL INVESTMENT LIMITATIONS.................................B-18

IV.     MANAGEMENT.........................................................B-19

V.      CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES................B-29

VI.     CODE OF ETHICS.....................................................B-30

VII.    PROXY VOTING POLICIES..............................................B-30

VIII.   PORTFOLIO HOLDINGS DISCLOSURE POLICIES AND PROCEDURES..............B-30

IX.     PORTFOLIO TRANSACTIONS.............................................B-30

X.      SHARE PRICE........................................................B-31

XI.     INFORMATION ABOUT TDAX INDEPENDENCE TARGET DATE SHARES.............B-31

XII.    CAPITAL STOCK AND OTHER SECURITIES.................................B-42

XIII.   DIVIDENDS AND DISTRIBUTIONS........................................B-43

XIV.    TAXATION...........................................................B-44

XV.     LICENSE GRANT......................................................B-46

XVI.    FINANCIAL STATEMENTS...............................................B-47



                                      B-2




                    I. GENERAL INFORMATION ABOUT THE COMPANY


        TDAX Funds, Inc. (the "Company") was organized as a Maryland corporation
on December 22, 2006. The Company is comprised of five different portfolios
(each, a "Fund" and together, the "Funds"). Each Fund currently offers one class
of shares known as TDAX Independence Target Date Shares. The Company may create
additional Funds or classes of shares. There is no limit on the number of full
and fractional shares that each Fund may issue. The Funds currently comprising
the Company are as follows:

               TDAX Independence 2010 Exchange-Traded Fund
               TDAX Independence 2020 Exchange-Traded Fund
               TDAX Independence 2030 Exchange-Traded Fund
               TDAX Independence 2040 Exchange-Traded Fund
               TDAX Independence In-Target Exchange-Traded Fund


        The Funds are registered with the United States Securities and Exchange
Commission (the "SEC") under the Investment Company Act of 1940 (the "1940 Act")
as open-end, diversified management investment companies.


        Each Fund offers and issues TDAX Independence Target Date Shares at net
asset value only in aggregations of a specified number of shares, generally in
exchange for a basket of equity and fixed income securities included in the
Underlying Index, together with the deposit of a specified cash payment. TDAX
Independence Target Date Shares have been approved for listing and secondary
trading on the New York Stock Exchange ("NYSE"), subject to notice of issuance.
TDAX Independence Target Date Shares will trade on the NYSE at market prices
that may be below, at, or above NAV. TDAX Independence Target Date Shares are
redeemable only in Creation Unit Aggregations, and, generally, in exchange for
portfolio securities and a specified cash payment. Creation Units are
aggregations of 200,000 shares. In the event of the liquidation of a Fund, the
Company may lower the number of shares in a Creation Unit.

        The Company reserves the right to offer a "cash" option for creations
and redemptions of TDAX Independence Target Date Shares, although it has no
current intention of doing so. TDAX Independence Target Date Shares may be
issued in advance of receipt of Deposit Securities subject to various conditions
including a requirement to maintain on deposit with the Company cash at least
equal to 115% of the market value of the missing Deposit Securities. See the
"Creation and Redemption of Creation Unit Aggregations" section. In each
instance of such cash creations or redemptions, transaction fees may be imposed
that will be higher than the transaction fees associated with in-kind creations
or redemptions. In all cases, such fees will be limited in accordance with SEC
requirements applicable to management investment companies offering redeemable
securities.


                   II. INVESTMENT POLICIES AND RELATED RISKS


        Each Fund's investment objective and principal investment strategies and
risks are set forth in the Prospectus. The following information supplements the
information contained in the Prospectus. In addition to the Funds' principal
investment strategies, each Fund may, from time to time, use certain other
strategies or engage in certain other investment practices that are not



                                      B-3



principal strategies. Some of these strategies and practices, and their
associated risks, are described below. In addition to these strategies and
practices, each Fund may invest in futures contracts, options on futures
contracts, options, as well as swaps on securities in the Underlying Indexes.
Each Fund may also hold cash and/or invest a portion of its assets in U.S.
Government securities, high-quality money market instruments and repurchase
agreements collateralized by the foregoing obligations.

        Limitations and restrictions on the level of investment in securities
that are discussed in the Prospectus or in this Statement of Additional
Information and that are expressed in terms of percentage limitations are
measured at the time of investment, unless specifically indicated otherwise.
Changes in market values, net assets, or other circumstances that cause a
percentage limitation to be exceeded will not necessarily require that any
security be sold.

        BORROWING. Each Fund may borrow money from banks or through reverse
repurchase agreements in amounts up to one-third of its total assets. A Fund
that borrows will pay interest on the borrowed money and may incur additional
transaction costs and will be subject to the risk that the return realized from
the investment of borrowed money will not exceed these interest and transaction
costs. With respect to borrowings, a Fund is required to maintain continuous
asset coverage (i.e., total assets including borrowings, less liabilities
exclusive of borrowings) of 300% of the amount borrowed. If the required 300%
asset coverage should decline as a result of market fluctuations or for other
reasons, a Fund may be required to sell some of its portfolio holdings to raise
cash and reduce the amount borrowed so as to restore the 300% asset coverage,
even though it may be disadvantageous from an investment standpoint to sell
securities at that time. In addition to these borrowings, each Fund may borrow
from banks up to 5% of the Fund's total assets for temporary or emergency
purposes. Borrowings of up to 5% for temporary and emergency purposes are not
subject to the requirements to maintain continuous asset coverage of 300%.

        COMMON STOCK. The Funds will invest in common stock. Common stock
represents an equity or ownership interest in an issuer. In the event an issuer
is liquidated or declares bankruptcy, the claims of owners of the issuer's
bonds, other debt holders, and owners of preferred stock take precedence over
the claims of those who own common stock.


        DEBT SECURITIES. The Funds will invest in debt securities. Debt
securities are used by issuers to borrow money. The issuer usually pays a fixed,
variable, or floating rate of interest, and must repay the amount borrowed,
usually at the maturity of the security. Some debt securities, such as zero
coupon bonds, do not pay interest but are sold at a deep discount from their
face values. Debt securities include corporate bonds, government securities,
repurchase agreements, and U.S. agency mortgage pass-through securities.


        Variable or floating rate debt securities provide for periodic
adjustments in the interest rate paid on the security. Variable rate securities
provide for a specified periodic adjustment in the interest rate, while floating
rate securities have interest rates that change whenever there is a change in a
designated benchmark rate or the issuer's credit quality. Some variable or
floating rate securities are structured with put features that permit holders to
demand payment of the unpaid principal balance plus accrued interest from the
issuers or certain financial intermediaries.


                                      B-4



        The Funds may invest in debt obligations that are considered
investment-grade debt securities (i.e., debt obligations classified within the
four highest ratings of a nationally recognized statistical organization such as
Moody's Investors Service ("Moody's") or Standard & Poor's ("S&P") or, if
unrated, determined to be of comparable quality).

        The Funds may also acquire zero coupon obligations. Such obligations
have greater price volatility than coupon obligations and will not result in
payment of interest until maturity. Since interest income is accrued throughout
the term of the zero coupon obligation but is not actually received until
maturity, a Fund, which is required for tax purposes to distribute to its
shareholders a certain percentage of its income, may have to sell other
securities to distribute the income prior to maturity of the zero coupon
obligation.

        DEPOSITARY RECEIPTS. The Funds may invest in American Depositary
Receipts (ADRs). ADRs are typically issued by a U.S. financial institution and
the underlying securities are issued by a foreign issuer. ADRs are securities
that evidence ownership interests in a security or a pool of securities that
have been deposited with a "depository" and that are listed on a national
exchange or quoted in OTC markets in the U.S. but represent shares of issuers
domiciled in another country. ADRs may be sponsored or unsponsored. ADRs traded
in the OTC markets which do not have an active or substantial secondary market
will be considered illiquid and will be subject to a Fund's limitations on
illiquid securities. ADRs receipts will not necessarily be denominated in the
same currency as their underlying securities. Generally, ADRs are issued in
registered form, denominated in U.S. dollars, and designed for use in the U.S.
securities markets. Although the two types of depositary receipt facilities
(unsponsored or sponsored) are similar, there are differences regarding a
holder's rights and obligations and the practices of market participants. A
depository may establish an unsponsored facility without participation by (or
acquiescence of) the underlying issuer. Holders of unsponsored depositary
receipts generally bear all the costs of the facility. The depository usually
charges fees upon the deposit and withdrawal of the underlying securities, the
conversion of dividends into U.S. dollars or other currency, the disposition of
non-cash distributions, and the performance of other services. The depository of
an unsponsored facility frequently is under no obligation to distribute
shareholder communications received from the underlying issuer or to pass
through voting rights to depositary receipt holders with respect to the
underlying securities.

        Sponsored depositary receipt facilities are created in generally the
same manner as unsponsored facilities, except that sponsored depositary receipts
are established jointly by a depository and the underlying issuer through a
deposit agreement. With sponsored facilities, the underlying issuer typically
bears some of the costs of the depositary receipts (such as dividend payment
fees of the depository), although most sponsored depositary receipts holders may
bear costs such as deposit and withdrawal fees. Depositories of most sponsored
depositary receipts agree to distribute notices of shareholder meetings, voting
instructions, and other shareholder communications and information to the
depositary receipt holders at the underlying issuer's request.

        For purposes of a Fund's investment policies, investments in ADRs will
be deemed to be investments in the underlying securities. Thus, an ADR
representing ownership of common stock of an issuer will be treated as common
stock of the issuer. Investments in ADRs involves risks similar to direct
investments in the securities of foreign issuers.


                                      B-5



        FOREIGN SECURITIES. A Fund may make foreign investments either directly
by purchasing foreign securities, or indirectly by purchasing depositary
receipts for foreign securities. Foreign securities are issued by entities
organized, domiciled, or with a principal place of business outside the United
States, such as foreign corporations and governments, and may trade in U.S. or
foreign securities markets. Investing in foreign securities involves certain
special risk considerations that are not typically associated with investing in
securities of U.S. companies or governments. The value of a Fund's investments
in foreign securities may be adversely affected by changes in political or
social conditions, diplomatic relations, potentially confiscatory taxation,
political or social instability, war, terrorism, nationalization, limitations on
the removal of funds or other assets, or diplomatic developments which could
affect U.S. investments in those countries. In addition, changes in government
administrations or economic or monetary policies in the United States or abroad
could result in the appreciation or depreciation of portfolio securities and
could favorably or unfavorably affect a Fund's investments. Certain countries
may also impose restrictions on a Fund's ability to repatriate investment income
or capital. Even where there is no outright restriction on repatriation of
investment income or capital, the mechanics of repatriation may affect certain
aspects of the operations of a Fund.

        Because foreign issuers are not generally subject to uniform accounting,
auditing, and financial reporting standards and practices comparable to those
applicable to U.S. issuers, there may be less publicly available information
about certain foreign issuers than about U.S. issuers. Evidence of securities
ownership may be uncertain in many foreign countries. As a result, there is a
risk that a Fund's trade details could be incorrectly or fraudulently entered at
the time of the transaction, resulting in a loss to the Funds. Securities of
foreign issuers are generally less liquid than securities of comparable U.S.
issuers and settlement periods for foreign security trades are often longer than
in the U.S., which may also affect liquidity. In certain countries, there is
less government supervision and regulation of stock exchanges, brokers, and
listed companies than in the United States. The rights of investors (such as the
Funds) in certain foreign countries may be more limited than shareholders of
U.S. corporations and the Funds may have greater difficulty taking appropriate
legal action in a foreign court rather than in a U.S. court. Although the
Advisor will endeavor to achieve most favorable execution costs for a Fund's
portfolio transactions in foreign securities under the circumstances,
commissions (and other transaction costs) are generally higher than those on
U.S. securities. In addition, it is expected that the expenses for custodian
arrangements relating to a Fund's foreign securities will be somewhat greater
than the expenses relating to a Fund's domestic securities. Certain foreign
governments levy withholding taxes against dividend and interest income from
foreign securities. Although in some countries a portion of these taxes is
recoverable by the Funds, the non-recovered portion of foreign withholding taxes
will reduce the income received from the companies making up a Fund.

        Foreign securities markets also have different registration, clearance
and settlement procedures. Registration, clearance and settlement of securities
in developing countries involve risks not associated with similar securities
transactions in the United States and other more developed markets. In certain
markets there have been times when settlements have been unable to keep pace
with the volume of securities transactions, making it difficult to conduct such
transactions. Delays in registration, clearance or settlement could result in
temporary periods when assets of a Fund are uninvested and no return is earned
thereon. The inability of a Fund to


                                      B-6



make intended security purchases due to registration, clearance or settlement
problems could cause a Fund to miss attractive investment opportunities.
Inability to dispose of portfolio securities due to registration, clearance or
settlement problems could result either in losses to a Fund due to subsequent
declines in the value of such portfolio security or, if the Fund has entered
into a contract to sell the security, could result in possible liability to the
purchaser.

        The value of the foreign securities held by a Fund that are not U.S.
dollar-denominated may be significantly affected by changes in currency exchange
rates. The U.S. dollar value of a foreign security generally decreases when the
value of the U.S. dollar rises against the foreign currency in which the
security is denominated and tends to increase when the value of the U.S. dollar
falls against such currency. In addition, the value of Fund assets may be
affected by losses and other expenses incurred in converting between various
currencies in order to purchase and sell foreign securities, and by currency
restrictions, exchange control regulation, currency devaluations, and political
and economic developments. To seek to minimize the impact of such factors on net
asset values, a Fund may engage in foreign currency transactions in connection
with its investments in foreign securities. A Fund will not speculate in foreign
currency exchange and will enter into foreign currency transactions only to
attempt to "hedge" the currency risk associated with investing in foreign
securities. Although such transactions tend to minimize the risk of loss that
would result from a decline in the value of the hedged currency, they also may
limit any potential gain that might result should the value of such currency
increase. Currency exchange transactions may be considered borrowings. A Fund
may also attempt to hedge its foreign currency exchange rate risk by engaging in
currency futures, options, and "cross-hedge" transactions. In cross-hedge
transactions, a Fund holding securities denominated in one foreign currency will
enter into a forward currency contract to buy or sell a different foreign
currency (one that the Advisor reasonably believes generally tracks the currency
being hedged with regard to price movements). The Advisor may select the
tracking (or substitute) currency rather than the currency in which the security
is denominated for various reasons, including in order to take advantage of
pricing or other opportunities presented by the tracking currency or because the
market for the tracking currency is more liquid or more efficient. Such
cross-hedges are expected to help protect a Fund against an increase or decrease
in the value of the U.S. dollar against certain foreign currencies.

        The forecasting of currency market movement is extremely difficult, and
whether any hedging strategy will be successful is highly uncertain. Moreover,
it is impossible to forecast with precision the market value of portfolio
securities at the expiration of a foreign currency forward contract.
Accordingly, a Fund may be required to buy or sell additional currency on the
spot market (and bear the expense of such transaction) if the Advisor's
predictions regarding the movement of foreign currency or securities markets
prove inaccurate. In addition, the use of cross-hedging transactions may involve
special risks, and may leave a Fund in a less advantageous position than if such
a hedge had not been established. Because foreign currency forward contracts are
privately negotiated transactions, there can be no assurance that a Fund will
have flexibility to roll-over a foreign currency forward contract upon its
expiration if it desires to do so. Additionally, there can be no assurance that
the other party to the contract will perform its services thereunder.

        Dividends and interest payable on a Fund's foreign portfolio securities
may be subject to foreign withholding taxes. Each Fund also may be subject to
taxes on trading profits in some


                                      B-7



countries. In addition, some countries have a transfer or stamp duties tax on
certain securities transactions. The imposition of these taxes will increase the
cost to a Fund of investing in any country imposing such taxes. To the extent
such taxes are not offset by credits or deductions allowed to investors under
the federal income tax provisions, they may reduce the net return to a Fund's
shareholders. The costs attributable to investing abroad are usually higher for
several reasons, such as the higher cost of investment research, higher cost of
custody of foreign securities, higher commissions paid on comparable
transactions on foreign markets and additional costs arising from delays in
settlements of transactions involving foreign securities.

        FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. The Funds may enter
into futures contracts and options on futures contracts. The Funds will only
enter into futures contracts and options on futures contracts that are
standardized and traded on a U.S. or foreign exchange, board of trade, or
similar entity, or quoted on an automated quotation system. The Funds will not
use futures or options on futures for speculative purposes.

        A futures contract is an agreement between two parties to buy or sell at
a specific time in the future a specific quantity of a commodity at a specific
price. The commodity may consist of an asset, a reference rate, or an index. The
value of a futures contract tends to increase and decrease in tandem with the
value of the underlying commodity. When entering into a futures contract, a Fund
would be required to make a good faith margin deposit in cash or U.S. Government
securities with a broker or custodian to initiate and maintain open positions in
futures contracts. A margin deposit is intended to assure completion of the
contract if it is not terminated prior to its specified delivery date. Brokers
may establish deposit requirements which are higher than the exchange minimums.
Initial margin deposits are typically calculated as a percentage of the
contract's market value.

        After a futures contract position is opened, the value of the contract
is marked to market daily. If the futures contract value changes, or if the
value of the securities placed in margin deposit with the broker changes, to the
extent that margin deposit requirements are no longer satisfied, the Fund will
be required to make payment of additional "variation margin." Conversely,
contract value changes or changes in the value of margin securities may occur in
such a way as to result in "excess margin," which would typically be repaid to
the Fund. When investing in futures contracts, the Funds must satisfy certain
asset segregation requirements to ensure that the use of futures is not
leveraged. When a Fund takes a long position in a futures contract, it must
segregate liquid assets equal to the purchase price of the contract, less any
margin or deposit. When a Fund takes a short position in a futures contract, the
Fund must segregate liquid assets in an amount equal to the market value of the
securities underlying such contract (less any margin or deposit), which amount
must be at least equal to the market price at which the short position was
established. Asset segregation requirements are not applicable when a Fund
"covers" an options or futures position generally by entering into an offsetting
position.

        An option on a futures contract (or futures option) conveys the right,
but not the obligation, to purchase (in the case of a call option) or sell (in
the case of a put option) a specific futures contract at a specific price
(called the "exercise" or "strike" price) any time before the option expires.
The seller of an option is called an option writer. The purchase price of an
option is called the premium. The potential loss to an option buyer is limited
to the amount of


                                      B-8



the premium plus transaction costs. This will be the case, for example, if the
option is held and not exercised prior to its expiration date. Generally, an
option writer sells options with the goal of obtaining the premium paid by the
option buyer. If an option sold by an option writer expires without being
exercised, the writer retains the full amount of the premium. The option writer,
however, has unlimited economic risk because its potential loss, except to the
extent offset by the premium received when the option was written, is equal to
the amount the option is "in-the-money" at the expiration date. A call option is
in-the-money if the value of the underlying futures contract exceeds the
exercise price of the option. A put option is in-the-money if the exercise price
of the option exceeds the value of the underlying futures contract. Generally,
any profit realized by an option buyer represents a loss for the option writer.

        Each Fund may engage in futures contracts and options on futures
contracts only to the extent permitted by the Commodity Futures Trading
Commission ("CFTC") and the SEC. In this regard, the Funds have claimed an
exclusion from registration as a "commodity pool operator" under the Commodity
Exchange Act. Each Fund intends to limit its hedging transactions in futures
contracts so that immediately after any such transaction, the aggregate initial
margin that is required to be posted by a Fund under the rules of the exchange
on which the futures contract (or futures option) is traded, plus any premiums
paid by such Fund on its open futures options positions, does not exceed 5% of
such Fund's total assets, after taking into account any unrealized profits and
unrealized losses on the Fund's open contracts (and excluding the amount that a
futures option is "in-the-money" at the time of purchase). An option to buy a
futures contract is "in-the-money" if the then-current purchase price of the
underlying futures contract exceeds the exercise or strike price; an option to
sell a futures contract is "in-the-money" if the exercise or strike price
exceeds the then-current purchase price of the contract that is the subject of
the option.

        The risk of loss in trading futures contracts and in writing futures
options can be substantial, because of the low margin deposits required, the
extremely high degree of leverage involved in futures and options pricing, and
the potential high volatility of the futures markets. As a result, a relatively
small price movement in a futures position may result in immediate and
substantial loss (or 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. A 15% decrease would result in a
loss equal to 150% of the original margin deposit if the contract were closed
out. Thus, a purchase or sale of a futures contract, and the writing of a
futures option, may result in losses in excess of the amount invested in the
position. In the event of adverse price movements, a Fund would continue to be
required to make daily cash payments to maintain its required margin. In such
situations, if the Fund has insufficient cash, it may have to sell portfolio
securities to meet daily margin requirements (and segregation requirements, if
applicable) at a time when it may be disadvantageous to do so. In addition, on
the settlement date, a Fund may be required to make delivery of the instruments
underlying the futures positions it holds.

        A Fund could suffer losses if it is unable to close out a futures
contract or a futures option because of an illiquid secondary market. Futures
contracts and futures options may be closed out only on an exchange which
provides a secondary market for such products. However, there can be no
assurance that a liquid secondary market will exist for any particular futures
product at any


                                      B-9



specific time. Thus, it may not be possible to close a futures or option
position. Moreover, most futures exchanges limit the amount of fluctuation
permitted in futures contract prices during a single trading day. The daily
limit establishes the maximum amount that the price of a futures contract may
vary either up or down from the previous day's settlement price at the end of a
trading session. Once the daily limit has been reached in a particular type of
contract, no trades may be made on that day at a price beyond that limit. The
daily limit governs only price movement during a particular trading day and
therefore does not limit potential losses, because the limit may prevent the
liquidation of unfavorable positions. Futures contract prices have occasionally
moved to the daily limit for several consecutive trading days with little or no
trading, thereby preventing prompt liquidation of future positions and
subjecting some futures traders to substantial losses. The inability to close
futures and options positions also could have an adverse impact on the ability
to hedge a portfolio investment or to establish a substitute for a portfolio
investment.

        A Fund bears the risk that the Advisor will incorrectly predict future
market trends. If the Advisor attempts to use a futures contract or a futures
option as a hedge against, or as a substitute for, a portfolio investment, the
Fund will be exposed to the risk that the futures position will have or will
develop imperfect or no correlation with the portfolio investment. This could
cause substantial losses for the Fund. While hedging strategies involving
futures products can reduce the risk of loss, they can also reduce the
opportunity for gain or even result in losses by offsetting favorable price
movements in other Fund investments.

        A Fund could lose margin payments it has deposited with its futures
broker, if, for example, the broker breaches its agreement with the Fund or
becomes insolvent or goes into bankruptcy. In that event, the Fund may be
entitled to return of margin owed to it only in proportion to the amount
received by the broker's other customers, potentially resulting in losses to the
Fund.

        GOVERNMENT OBLIGATIONS. The Funds may invest in U.S. Government
obligations, including U.S. Treasury bonds, notes and bills and the obligations
of Federal Home Loan Banks, Federal Farm Credit Banks, Federal Land Banks, the
Federal Housing Administration, the Farmers Home Administration, the
Export-Import Bank of the United States, the Small Business Administration, the
Government National Mortgage Association, the Federal National Mortgage
Association, the General Services Administration, the Student Loan Marketing
Association, the Central Bank for Cooperatives, the Federal Home Loan Mortgage
Corporation, the Federal Intermediate Credit Banks and the Maritime
Administration. Obligations of certain agencies and instrumentalities of the
U.S. Government, such as those of the Government National Mortgage Association,
are supported by the right of the issuer to borrow from the Treasury; others,
such as those of the Federal National Mortgage Association, are supported by the
discretionary authority of the U.S. Government to purchase the agency's
obligations; still others, such as those of the Student Loan Marketing
Association, are supported only by the credit of the instrumentality. No
assurance can be given that the U.S. Government would provide financial support
to U.S. Government-sponsored instrumentalities if it is not obligated to do so
by law.


                                      B-10



        Securities issued or guaranteed by the U.S. government have historically
involved little risk of loss of principal if held to maturity. However, due to
fluctuations in interest rates, the market value of such securities may vary
during the period a shareholder owns shares of a Fund.


        INVESTMENTS IN OTHER INVESTMENT COMPANIES. Each Fund may invest in other
investment companies. As a shareholder in an investment company, a Fund would
bear its ratable share of that investment company's expenses, including its
management and administration fees.


        MONEY MARKET INSTRUMENTS. The Funds may invest in "money market
instruments," which include, among other things, bank obligations, commercial
paper and corporate bonds with remaining maturities of 13 months or less.

        Bank obligations include bankers' acceptances, negotiable certificates
of deposit, and non-negotiable time deposits earning a specified return and
issued by a U.S. bank which is a member of the Federal Reserve System or insured
by the Bank Insurance Fund of the Federal Deposit Insurance Corporation
("FDIC"), or by a savings and loan association or savings bank which is insured
by the Savings Association Insurance Fund of the FDIC. Bank obligations also
include U.S. dollar-denominated obligations of foreign branches of U.S. banks
and obligations of domestic branches of foreign banks.

        Investments by a Fund in commercial paper will consist of issues that
are rated "A-2" or better by S&P or "Prime-2" or better by Moody's. In addition,
each Fund may acquire unrated commercial paper and corporate bonds that are
determined by the Advisor at the time of purchase to be of comparable quality to
rated instruments that may be acquired by each Fund.

        Commercial paper may include variable and floating rate instruments.
While there may be no active secondary market with respect to a particular
instrument purchased by a Fund, each Fund may, from time to time as specified in
the instrument, demand payment of the principal of the instrument or may resell
the instrument to a third party. The absence of an active secondary market,
however, could make it difficult for a Fund to dispose of the instrument if the
issuer defaulted on its payment obligation or during periods when a Fund is not
entitled to exercise its demand rights, and a Fund could, for this or other
reasons, suffer a loss with respect to such instrument.



        OPTIONS. The Funds may purchase put and call options. An option on a
security (or index) is a contract that gives the holder of the option, in return
for the payment of a "premium," the right, but not the obligation, to buy from
(in the case of a call option) or sell to (in the case of a put option) the
writer of the option the security underlying the option (or the cash value of
the index) at a specified exercise price prior to the expiration date of the
option. The writer of an option on a security has the obligation upon exercise
of the option (1) to deliver the underlying security upon payment of the
exercise price (in the case of a call option) or (2) to pay the exercise price
upon delivery of the underlying security (in the case of a put option). The
writer of an option on an index has the obligation upon exercise of the option
to pay an amount equal to the cash value of the index minus the exercise price,
multiplied by a specified multiplier for the index option. Unlike
exchange-traded options, which are standardized, the terms of OTC options
(options not traded on exchanges) generally are established through negotiation
with the other


                                      B-11



party to the option contract. While this type of arrangement allows the
purchaser or writer greater flexibility to tailor an option to its needs, OTC
options generally involve greater credit risk than exchange-traded options,
which are guaranteed by the clearing organization of the exchanges where they
are traded.

        A call option grants to the holder the right to buy (and obligates the
writer to sell) the underlying security at the strike price. A put option grants
to the holder the right to sell (and obligates the writer to buy) the underlying
security at the strike price. The purchase price of an option is called the
"premium." The potential loss to an option buyer is limited to the amount of the
premium plus transaction costs. This will be the case if the option is held and
not exercised prior to its expiration date. Generally, an option writer sells
options with the goal of obtaining the premium paid by the option buyer, but
that person could also seek to profit from an anticipated rise or decline in
option prices. If an option sold by an option writer expires without being
exercised, the writer retains the full amount of the premium. The option writer,
however, has unlimited economic risk because its potential loss, except to the
extent offset by the premium received when the option was written, is equal to
the amount the option is "in-the-money" at the expiration date. A call option is
in-the-money if the value of the underlying position exceeds the exercise price
of the option. A put option is in-the-money if the exercise price of the option
exceeds the value of the underlying position. Generally, any profit realized by
an option buyer represents a loss for the option writer. The writing of an
option will not be considered to constitute the issuance of a "senior security"
by a Fund for purposes of the 1940 Act, and such transaction will not be subject
to the 300% asset coverage requirement otherwise applicable to borrowings by a
Fund, if the Fund segregates liquid assets in a segregated account in sufficient
amount to cover the transaction.

        If a trading market in particular options were to become unavailable,
investors in those options (such as the Funds) would be unable to close out
their positions until trading resumes, and they may be faced with substantial
losses if the value of the underlying interest moves adversely during that time.
Even if the market were to remain available, there may be times when options
prices will not maintain their customary or anticipated relationships to the
prices of the underlying interests and related interests. Lack of investor
interest, changes in volatility, or other factors or conditions might adversely
affect the liquidity, efficiency, continuity, or even the orderliness of the
market for particular options.

        A Fund bears the risk that the Advisor will not accurately predict
future market trends. If the Advisor attempts to use an option as a hedge
against, or as a substitute for, a portfolio investment, the Fund will be
exposed to the risk that the option will have or will develop imperfect or no
correlation with the portfolio investment. This could cause substantial losses
for the Fund. While hedging strategies involving options can reduce the risk of
loss, they can also reduce the opportunity for gain or even result in losses by
offsetting favorable price movements in other Fund investments. Many options, in
particular OTC options, are complex and often valued based on subjective
factors. Improper valuations can result in increased cash payment requirements
to counterparties or a loss of value to a Fund.

        REAL ESTATE INVESTMENT TRUSTS (REITs). The Funds may invest in REITs,
which pool investors' funds for investment primarily in income-producing real
estate or real estate related loans or interests. Unlike corporations, REITs do
not have to pay income taxes if


                                      B-12



they meet certain requirements of the Internal Revenue Code of 1986, as amended
(the "Code"). Among other organizational and operational requirements, to
qualify, a REIT must distribute at least 95% of its taxable income to its
shareholders and receive at least 75% of that income from rents, mortgages and
sales of property.

        REITs can generally be classified as equity REITs, mortgage REITs and
hybrid REITs. Equity REITs invest the majority of their assets directly in real
property and derive their income primarily from rental and lease payments.
Equity REITs can also realize capital gains by selling properties that have
appreciated in value. Mortgage REITs make loans to commercial real estate
developers and derive their income primarily from interest payments on such
loans. Hybrid REITs combine the characteristics of both equity and mortgage
REITs.

        An equity REIT's performance ultimately depends on the types and
locations of the properties it owns and on how well it manages its properties.
For instance, rental income could decline because of extended vacancies,
increased competition from nearby properties, tenants' failure to pay rent, or
incompetent management. Property values could decrease because of overbuilding,
environmental liabilities, uninsured damages caused by natural disasters, a
general decline in the neighborhood, rent controls, losses due to casualty or
condemnation, increases in property taxes and/or operating expenses, or changes
in zoning laws or other factors.

        Changes in interest rates could affect the performance of REITs. In
general, during periods of rising interest rates, REITs may lose some of their
appeal to investors who may be able to obtain higher yields from other
income-producing investments, such as long-term bonds. Higher interest rates may
also mean that it is more expensive to finance property purchases, renovations
and improvements, which could hinder a REIT's performance. During periods of
declining interest rates, certain mortgage REITs may hold mortgages that the
mortgagors elect to prepay, which prepayment may diminish the yield on
securities issued by such mortgage REITs.

        While equity REITs are affected by changes in the value of the
underlying properties they own, mortgage REITs are affected by changes in the
value of the properties to which they have extended credit. REITs may not be
diversified and are subject to the risks involved with financing projects. REITs
may also be subject to substantial cash flow dependency and self-liquidation. In
addition, REITs could possibly fail to qualify for tax-free pass-through of
income under the Code or to maintain their exemptions from registration under
the 1940 Act.

        Such factors may also adversely affect a borrower's or a lessee's
ability to meet its obligations to a REIT. In the event of a default by a
borrower or lessee, a REIT may experience delays in enforcing its rights as a
mortgagee or lessor and may incur substantial costs associated with protecting
its investments.

        Under certain circumstances the Fund could own real estate directly as a
result of a default on debt securities it owns. If the Fund has rental income or
income from the direct disposition of real property, the receipt of such income
may adversely affect its ability to retain its tax status as a regulated
investment company.

        REPURCHASE AGREEMENTS. The Funds may enter into repurchase agreements. A
repurchase agreement is an agreement under which a Fund acquires a fixed income
security


                                      B-13



(generally a security issued by the U.S. government or an agency thereof, a
banker's acceptance, or a certificate of deposit) from a commercial bank,
broker, or dealer, and simultaneously agrees to resell such security to the
seller at an agreed upon price and date (normally, the next business day).
Because the security purchased constitutes collateral for the repurchase
obligation, a repurchase agreement may be considered a loan that is
collateralized by the security purchased. The resale price reflects an agreed
upon interest rate effective for the period the instrument is held by a Fund and
is unrelated to the interest rate on the underlying instrument. In these
transactions, the securities acquired by a Fund (including accrued interest
earned thereon) must have a total value in excess of the value of the repurchase
agreement and be held by a custodian bank until repurchased. In addition, the
Advisor will monitor a Fund's repurchase agreement transactions generally and
will evaluate the creditworthiness of any bank, broker, or dealer party to a
repurchase agreement relating to a fund. The use of repurchase agreements
involves certain risks. One risk is the seller's ability to pay the agreed-upon
repurchase price on the repurchase date. If the seller defaults, the Fund may
incur costs in disposing of the collateral, which would reduce the amount
realized thereon. If the seller seeks relief under the bankruptcy laws, the
disposition of the collateral may be delayed or limited. For example, if the
other party to the agreement becomes insolvent and subject to liquidation or
reorganization under the bankruptcy or other laws, a court may determine that
the underlying security is collateral for a loan by the Fund not within its
control and therefore the realization by the Fund on such collateral may be
automatically stayed. Finally, it is possible that the Fund may not be able to
substantiate its interest in the underlying security and may be deemed an
unsecured creditor of the other party to the agreement. Repurchase agreements
are usually for short periods, seven days or less, but can be for longer
periods. A Fund will not enter into a repurchase agreement of a duration of more
than seven days if, taken together with other illiquid securities, more than 15%
of a Fund's net assets would be so invested.

        RESTRICTED AND ILLIQUID SECURITIES. Each Fund may acquire investments
that are illiquid or have limited liquidity, such as private placements or
investments that are not registered under the Securities Act of 1933, as amended
(the "1933 Act"), and cannot be offered for public sale in the United States
without first being registered under the 1933 Act. An illiquid investment is any
investment that cannot be disposed of within seven days in the normal course of
business at approximately the amount at which it is valued by a Fund. The price
a Fund pays for illiquid securities or receives upon resale may be lower than
the price paid or received for similar securities with a more liquid market. A
Fund will not invest more than 15% of the value of its net assets in securities
that are illiquid.

        Historically, illiquid securities have included securities subject to
contractual or legal restrictions on resale because they have not been
registered under the 1933 Act, securities which are otherwise not readily
marketable and repurchase agreements having a maturity of longer than seven
days. Securities which have not been registered under the 1933 Act are referred
to as private placements or restricted securities and are purchased directly
from the issuer or in the secondary market. Limitations on resale may have an
adverse effect on the marketability of portfolio securities and a Fund might be
unable to dispose of restricted or other illiquid securities promptly or at
reasonable prices and might thereby experience difficulty satisfying redemptions
within seven days. A Fund might also have to register such restricted securities
in order to dispose of them which, if possible at all, would result in
additional expense and delay. Adverse market conditions could impede such a
public offering of securities.


                                      B-14



        Certain of the Funds may, from time to time, purchase other non-publicly
traded securities, private placements and restricted securities. These
securities may involve a higher degree of business and financial risk that can
result in substantial losses. As a result of the absence of a public trading
market for these securities, they may be less liquid than publicly-traded
securities. Although these securities may be resold in privately negotiated
transactions, the prices realized from sales could be less than those originally
paid by a Fund or less than what may be considered the fair value of such
securities. Furthermore, companies whose securities are not publicly traded may
not be subject to the disclosure and other investor protection requirements
which might be applicable if their securities were publicly-traded. If such
securities are required to be registered under the securities laws of one or
more jurisdictions before being resold, a Fund may be required to bear the
expenses of registration.

        A large institutional market has developed for certain securities that
are not registered under the 1933 Act, including repurchase agreements,
commercial paper, foreign securities, municipal securities and corporate bonds
and notes. Institutional investors depend on an efficient institutional market
in which the unregistered security can be readily resold or on an issuer's
ability to honor a demand for repayment. The fact that there are contractual or
legal restrictions on resale of such investments to the general public or to
certain institutions may not be indicative of their liquidity.

        Each Fund may purchase Rule 144A securities sold to institutional
investors without registration under the 1933 Act. Rule 144A allows a broader
institutional trading market for securities otherwise subject to restriction on
their resale to the general public. Rule 144A establishes a "safe harbor" from
the registration requirements of the 1933 Act for resales of certain securities
to qualified institutional buyers.

        Rule 144A securities may be determined to be liquid in accordance with
guidelines established and approved by the Board of Directors of the Funds. If
trading in Rule 144A securities were to decline, these securities could become
illiquid after being purchased, increasing the level of illiquidity of a Fund.
As a result, a Fund holding these securities might not be able to sell these
securities when the Advisor wishes to do so, or might have to sell them at less
than fair value.

        REVERSE REPURCHASE AGREEMENTS. The Funds may invest in reverse
repurchase agreements. In a reverse repurchase agreement, a Fund sells a
security to another party, such as a bank or broker-dealer, in return for cash
and agrees to repurchase that security at an agreed-upon price and time. The
repurchase price will include an interest element. A reverse repurchase
agreement is considered to be a borrowing for purposes of the 1940 Act. A Fund
will typically invest the cash received from the reverse repurchase agreement
and will also continue to receive any principal and interest payments on the
security loaned to the reverse repurchase agreement counterparty during the term
of the agreement. Reverse repurchase agreements involve the risk that a Fund
will not realize earnings from the investment of the cash proceeds obtained from
the transaction in sufficient amount to offset the interest paid to the reverse
repurchase agreement counterparty. The Funds' custodian bank will be required
segregate liquid assets in a segregated account in sufficient amount to cover a
Fund's obligation to repurchase the securities under the contract. A Fund will
enter into reverse repurchase agreements only with parties whose
creditworthiness has been reviewed and found satisfactory by the Advisor.


                                      B-15



        SECURITIES LENDING. A Fund may lend its investment securities to
qualified institutional investors (typically brokers, dealers, banks, or other
financial institutions). A Fund receives collateral equal to at least 105% of
the current market value of the loaned securities and that collateral is marked
to market daily. By lending its investment securities, a Fund attempts to
increase its net investment income through the receipt of interest on the
collateral received. The Funds will pay reasonable administration and custodial
fees in connection with the loan of securities. If the borrower defaults on its
obligation to return the securities lent because of insolvency or other reasons,
a Fund could experience delays and costs in recovering the securities lent or in
gaining access to the collateral. These delays and costs could be greater for
foreign securities. If a Fund is not able to recover the securities lent, a Fund
may sell the collateral and purchase a replacement investment in the market. The
value of the collateral could decrease below the value of the replacement
investment by the time the replacement investment is purchased. Cash received as
collateral through loan transactions may be invested in other eligible
securities. Investing this cash subjects that investment to market appreciation
or depreciation. Loans of portfolio securities may not exceed 33 1/3% of a
Fund's total assets.

        SHORT-TERM INSTRUMENTS. The Fund may invest in short-term instruments,
which include obligations of the U.S. government and its agencies or
instrumentalities; commercial paper, variable amount master demand notes and
other debt securities, including high quality U.S. dollar-denominated short-term
bonds and notes issued by domestic and foreign corporations; variable and
floating rate securities; bank obligations; repurchase agreements collateralized
by these securities; and shares of other investment companies that primarily
invest in any of the above-referenced securities.

        Short-term instruments may also include U.S. dollar-denominated
certificates of deposit, time deposits, bankers' acceptances and other
short-term obligations issued by domestic banks and domestic or foreign branches
or subsidiaries of foreign banks. Certificates of deposit are certificates
evidencing the obligation of a bank to repay funds deposited with it for a
specified period of time. Such instruments include Yankee Certificates of
Deposit ("Yankee CDs"), which are certificates of deposit denominated in U.S.
dollars and issued in the United States by the domestic branch of a foreign
bank. Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate. Time
deposits which may be held by the Funds are not insured by the FDIC or any other
agency of the U.S. government. Bankers' acceptances are credit instruments
evidencing the obligation of a bank to pay a draft drawn on it by a customer.
These instruments reflect the obligation both of the bank and of the drawer to
pay the face amount of the instrument upon maturity.

        Domestic commercial banks organized under federal law are supervised and
examined by the Comptroller of the Currency and are required to be members of
the Federal Reserve System. Domestic banks organized under state law are
supervised and examined by state banking authorities but are members of the
Federal Reserve System only if they elect to join. In addition, state banks are
subject to federal examination and to a substantial body of federal law and
regulation. As a result of federal or state laws and regulations, domestic
banks, among other things, generally are required to maintain specified levels
of reserves, are limited in the amounts which they can loan to a single
borrower, and are subject to other regulations designed to promote financial
soundness. However, not all of such laws and regulations apply to the foreign
branches of domestic banks.


                                      B-16



        Obligations of foreign branches and subsidiaries of domestic banks and
domestic and foreign branches of foreign banks, such as certificates of deposit
and time deposits, may be general obligations of the parent banks in addition to
the issuing branch, or may be limited by the terms of a specific obligation and
governmental regulation. Such obligations are subject to different risks than
are those of domestic banks. These risks include foreign economic and political
developments, foreign governmental restrictions that may adversely affect
payment of principal and interest on the obligations, foreign exchange controls
and foreign withholding and other taxes on interest income. Foreign branches and
subsidiaries are not necessarily subject to the same or similar regulatory
requirements that apply to domestic banks, such as mandatory reserve
requirements, loan limitations, and accounting, auditing and financial record
keeping requirements. In addition, less information may be publicly available
about a foreign branch of a domestic bank or about a foreign bank than about a
domestic bank.

        SWAP AGREEMENTS. A swap agreement is an agreement between two parties to
exchange payments at specified dates (periodic payment dates) on the basis of a
specified amount (notional amount) with the payments calculated with reference
to a specified asset, reference rate, or index. Examples of swap agreements
include, but are not limited to, interest rate swaps, credit default swaps,
equity swaps, commodity swaps, foreign currency swaps, index swaps, and total
return swaps. Most swap agreements provide that when the periodic payment dates
for both parties are the same, payments are netted, and only the net amount is
paid to the counterparty entitled to receive the net payment. Consequently, a
Fund's current obligations (or rights) under a swap agreement will generally be
equal only to the net amount to be paid or received under the agreement, based
on the relative values of the positions held by each counterparty. Swap
agreements allow for a wide variety of transactions. For example, fixed rate
payments may be exchanged for floating rate payments; U.S. dollar-denominated
payments may be exchanged for payments denominated in a different currency; and
payments tied to the price of one asset, reference rate, or index may be
exchanged for payments tied to the price of another asset, reference rate, or
index. A Fund is required to maintain liquid assets in a segregated account in
an amount sufficient to cover its obligations under the swap agreement.

        The use of swap agreements by a Fund entails certain risks, which may be
different from, or possibly greater than, the risks associated with investing
directly in the securities and other investments that are the referenced asset
for the swap agreement. For example, if the counterparty under a swap agreement
defaults on its obligation to make payments due from it, as a result of its
bankruptcy or otherwise, a Fund may lose such payments altogether, or collect
only a portion thereof, which collection could involve costs or delays. Swaps
are highly specialized instruments that require investment techniques, risk
analyses, and tax planning different from those associated with stocks, bonds,
and other traditional investments. The use of a swap requires an understanding
not only of the referenced asset, reference rate, or index but also of the swap
itself, without the benefit of observing the performance of the swap under all
possible market conditions.

        Swap agreements may be subject to liquidity risk, which exists when a
particular swap is difficult to purchase or sell. If a swap transaction is
particularly large or if the relevant market is illiquid (as is the case with
many OTC swaps), it may not be possible to initiate a transaction or liquidate a
position at an advantageous time or price, which may result in significant
losses. In addition, a swap transaction may be subject to a Fund's limitation on
investments in illiquid


                                      B-17



securities. Swap agreements may be subject to pricing risk, which exists when a
particular swap becomes extraordinarily expensive (or cheap) relative to
historical prices or the prices of corresponding cash market instruments. Under
certain market conditions, it may not be economically feasible to initiate a
transaction or liquidate a position in time to avoid a loss or take advantage of
an opportunity or to realize the intrinsic value of the swap agreement.

        The swaps market is a relatively new market and is largely unregulated.
It is possible that developments in the swaps market, including potential
government regulation, could adversely affect a Fund's ability to terminate
existing swap agreements or to realize amounts to be received under such
agreements.


        U.S. AGENCY MORTGAGE PASS-THROUGH SECURITIES. The Funds may purchase
U.S. Agency pass-throughs mortgage obligations that meet each Fund's selection
criteria and are investment grade or of comparable quality. Mortgage
pass-throughs are securities that pass through to investors an undivided
interest in a pool of underlying mortgages. These are issued or guaranteed by
U.S. government agencies such as the Government National Mortgage Association
("GNMA"), the Federal Home Loan Mortgage Corporation ("FHLMC") and the Federal
National Mortgage Association ("FNMA").


                    III. FUNDAMENTAL INVESTMENT LIMITATIONS

        Each Fund has adopted the following investment limitations as
fundamental limitations, which cannot be changed without the approval of the
holders of a majority of a Fund's outstanding shares. For these purposes, a
"majority of outstanding shares" means the vote of the lesser of: (1) 67% or
more of the outstanding shares of a Fund, if the holders of more than 50% of a
Fund's outstanding shares are present or represented by proxy; or (2) more than
50% of the outstanding shares of a Fund. The Funds may not:

        1. Borrow money or issue senior securities, except through reverse
repurchase agreements or otherwise as permitted under the 1940 Act, as
interpreted, modified, or otherwise permitted by regulatory authority.

        2. Purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments. This limitation shall not prevent
a Fund from purchasing, selling, or entering into futures contracts, or
acquiring securities or other instruments and options thereon backed by, or
related to, physical commodities.

        3. Invest 25% or more of the value of its total assets in securities of
issuers in any one industry or group of industries. This restriction does not
apply to obligations issued or guaranteed by the United States Government, its
agencies or instrumentalities.

        4. Make loans, except as permitted under the 1940 Act, and as
interpreted, modified, or otherwise permitted by regulatory authority.

        5. Purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments. This limitation shall not prevent a Fund
from investing in securities or other instruments backed by real estate or
securities issued by any company engaged in the real estate business.


                                      B-18



        6. Act as an underwriter of another issuer's securities, except to the
extent that a Fund may be deemed to be an underwriter within the meaning of the
1933 Act in connection with the purchase and sale of portfolio securities.

        7. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to secure permitted borrowings. Initial and variation margin for futures
and options contracts will not be deemed to be a pledge of a Fund's assets.

        Compliance with the investment limitations set forth above is measured
at the time the securities are purchased. If a percentage restriction is adhered
to at the time the investment is made, a later change in percentage resulting
from a change in the market value of assets will not constitute a violation of
such restriction, however, with respect to borrowings and illiquid securities,
as described herein, changes in the percentages of such securities after the
time of investment will be monitored and assessed to ensure the Funds'
compliance with said limitations.

                                 IV. MANAGEMENT

OFFICERS AND DIRECTORS


        The business and affairs of the Funds are managed under the direction of
the Company's Board of Directors (the "Board"). The Directors and executive
officers of the Company, their addresses, ages, principal occupations during the
past five years, and other affiliations are set forth below. Each Director
serves until his termination; retirement, resignation, or death; or as otherwise
specified in the Company's organizational documents. The Board is currently
comprised of four Directors, of whom three Directors are not "interested"
persons of the Company or the Advisor, as defined under the 1940 Act
("Disinterested Directors"). The Directors do not serve as directors for any
other funds advised by the Advisor or any funds that have an investment advisor
that is affiliated with the Advisor. The mailing address of the Directors and
officers is 420 Lexington Avenue, New York, New York 10170.



                                      B-19




                                      Term of
                                      Office                       Number of
                                      and        Principal         Portfolios in
                          Position(s) Length     Occupation(s)     Fund Complex     Other
Name, Address,            Held with   of Time    During Past 5     Overseen by      Directorships
and Age                   Fund        Served     Years             Director         held by Director
-------                   ----        ------     -----             --------         ----------------

Disinterested Directors:


R. Charles Tschampion     Director,
Age 61,                   Chairman    Since      Director,            5             Trustee and
420 Lexington Avenue      of the      2007       Industry                           Member of the
New York, New York        Audit                  Relations, CFA                     Audit Committee,
10170                     Committee              Institute since                    SPDR Select
                          and                    2005; Managing                     Sector Trust;
                          Member of              Director of                        Trustee of Lehigh
                          the                    Investment                         University and
                          Nominating             Research and                       Chair of the
                          Committee              Managing                           Investment
                                                 Director of                        Sub-Committee for
                                                 Defined                            the Lehigh
                                                 Contribution                       University
                                                 Plans, General                     Endowment Fund;
                                                 Motors Asset                       Director, Select
                                                 Management                         High Yield
                                                 Corporation                        Oversees Fund,
                                                 from 1994 to                       LLC.
                                                 2005.

Ernest J. Scalberg        Director,
Age 61,                   Member of   Since      Associate Vice       5             Trustee, SPDR
420 Lexington Avenue      the Audit   2007       President for                      Select Sector
New York, New York        and                    External                           Trust; Trustee,
10170                     Nominating             Programs and                       The International
                          Committees             Dean of the                        University in
                                                 Fisher Graduate                    Geneva.
                                                 School of
                                                 International
                                                 Business,
                                                 Monterey
                                                 Institute of
                                                 International
                                                 Studies since
                                                 2001.

Michael G. Smith          Director,
Age 62,                   Member of   Since      Retired since        5             Director, Ivy
420 Lexington Avenue      the Audit   2007       1999.                              Funds, Inc.;
New York, New York        and                    Formerly,                          Director,
10170                     Nominating             Managing                           Northwestern
                          Committees             Director,                          Mutual Series
                                                 Corporate and                      Fund, Inc.;
                                                 Institutional                      Director, Mason
                                                 Client Group,                      Street Funds,
                                                 Central Region,                    Inc.;  Director,
                                                 Merrill Lynch &                    Cox Business
                                                 Co., Inc.                          School, Southern
                                                                                    Methodist
                                                                                    University.

Interested Director/
Officers:

Anthony F. Dudzinski      Director    Since      President,           5             N/A
Age 44,                   and           2006     XShares Group
420 Lexington Avenue      Chairman               LLC since 2006;
New York, New York 10170  of the                 Chief Executive
                          Board and              Officer and
                          Chief                  Chief Operating
                          Operating              Officer of
                          Officer                XShares
                                                 Advisors LLC




                                      B-20





                                      Term of
                                      Office                       Number of
                                      and        Principal         Portfolios in
                          Position(s) Length     Occupation(s)     Fund Complex     Other
Name, Address,            Held with   of Time    During Past 5     Overseen by      Directorships
and Age                   Fund        Served     Years             Director         held by Director
-------                   ----        ------     -----             --------         ----------------

                                              since 2006;
                                                 Vice-President,
                                                 HealthShares(TM)
                                                 Inc. since 2006;
                                                 CEO US Euro
                                                 Securities from
                                                 2004 to 2006;
                                                 President and
                                                 COO of M. H.
                                                 Meyerson & Co.,
                                                 Inc. from 2000
                                                 to 2003.


David M. Kelley           President   Since      Senior Vice          N/A           N/A
Age 47,                   and Chief   2006       President of TD
420 Lexington Avenue      Executive              AMERITRADE
New York, New York 10170  Officer                Holding
                                                 Corporation
                                                 since 2006;
                                                 Chief
                                                 Technology
                                                 Officer,
                                                 Corporate
                                                 Division,
                                                 Merrill Lynch &
                                                 Co., Inc. from
                                                 2002 to 2005.

David W. Jaffin           Treasurer   Since      Chief Operating      N/A           N/A
Age 52,                   and           2006     Officer,
420 Lexington Avenue      Secretary              XShares Group
New York, New York 10170                         LLC since 2006;
                                                 Chief Financial
                                                 Officer,
                                                 XShares
                                                 Advisors LLC
                                                 since 2006;
                                                 Secretary and
                                                 Treasurer,
                                                 HealthShares(TM)
                                                 Inc. since
                                                 2006;
                                                 President,
                                                 Technical
                                                 Coatings
                                                 Laboratory from
                                                 2000 to 2005.


------------------------
* Officers/Directors of the Company are "interested persons" as defined in the
1940 Act.


        No officer, director or employee of the Advisor or any of its affiliates
receives any compensation from the Company or the Funds for serving as an
officer or Director of the Company or the Funds. The Company pays each
Disinterested Director an annual fee of $30,000, plus $4,000 per meeting
attended ($1,000 per meeting, if attended telephonically). Each Disinterested
Director will also receive $2,000 per Audit Committee meeting attended, although
the Audit Committee Chairman will receive $3,000 per Audit Committee meeting
attended. The Company reimburses each Director for their costs and expenses
associated with



                                      B-21




their performance of their duties hereunder, including the cost and expenses
associated with attendance of meetings of the Board.

        Directors' fees and expenses are allocated among the Funds based on each
Fund's relative net assets. Assuming that four meetings of the Board and two
meetings of the Audit Committee are held annually, it is estimated that the
compensation to each Director for the fiscal year ended May 31, 2008, will
be(1):



------------------------
(1) The estimated compensation shown in this chart is for the period beginning
on July 24, 2007, through May 31, 2008. This compensation is estimated only,
based on current compensation levels. There is no assurance that this estimate
is reliable and actual compensation may be higher or lower than that reflected
above.


                                      B-22





                                            Pension or                              Total
                                            Retirement                        Compensation From
                           Aggregate     Benefits Accrued      Estimated       Company and Fund
    Name of Person,      Compensation       as Part of      Annual Benefits    Complex Paid to
       Position          from Company    Company Expenses   Upon Retirement       Directors
----------------------  --------------- ------------------ ----------------   -------------------


Anthony F. Dudzinski,          -                -                  -                  -
Director and Chairman
of the Board

R. Charles Tschampion,      $52,000             -                  -               $52,000
Director and Chairman
of the Audit Committee

Ernest J. Scalberg,         $50,000             -                  -               $50,000
Director

Michael G. Smith,           $50,000             -                  -               $50,000
Director





        Director Ownership of Fund Shares. The following table shows the dollar
range of fund shares beneficially owned by each Director as of August 20, 2007.
Since the Funds have not yet commenced operations, none of the Directors own any
shares of the Funds.





                                                                             AGGREGATE DOLLAR RANGE OF
                                                                              EQUITY SECURITIES IN ALL
                                        DOLLAR RANGE OF EQUITY                   FUNDS OVERSEEN BY
     NAME OF DIRECTOR                  SECURITIES FOR EACH FUND                 DIRECTOR IN COMPLEX
     ----------------                  ------------------------                 -------------------



Anthony F. Dudzinski                              N/A                                   N/A

R. Charles Tschampion                             N/A                                   N/A

Ernest J. Scalberg                                N/A                                   N/A

Michael G. Smith                                  N/A                                   N/A





BOARD COMMITTEES

        The Funds' Board of Directors has established the following committees:

        Audit Committee. The Board has an Audit Committee that meets at least
twice annually to select, oversee and set the compensation of the Company's
independent registered public accounting firm (the "Accountants"). The Audit
Committee is responsible for pre-approving all audit and non-audit services
performed by the Accountants for the Company and for pre-approving certain
non-audit services performed by the Accountants for the Advisor and each
Sub-Advisor and certain of their control persons. The Audit Committee is
comprised of all of the Company's Disinterested Directors. The Audit Committee
also meets with the Accountants to review the Funds' financial statements and to
report on its findings to the Board, and to


                                      B-23



provide the Accountants the opportunity to report on various other matters. The
Audit Committee also acts as the Company's qualified legal compliance committee.

        Nominating Committee. The Board has a Nominating Committee to whose
discretion the selection and nomination of directors who are not "interested
persons," as defined in the 1940 Act, of the Funds is committed. The Nominating
Committee is comprised of all of the Company's Disinterested Directors. This
committee will consider any candidate for Director recommended by a current
shareholder if the Committee is required by law to do so.

INVESTMENT ADVISOR AND SUB-ADVISORS


        XShares Advisors LLC (the "Advisor") serves as the investment advisor to
the Funds with overall responsibility for the general management and
administration of the Funds, subject to the supervision of the Company's Board
of Directors. The Advisor is also responsible for employing any sampling
strategy for the Funds. The Advisor is located at 420 Lexington Avenue, New
York, NY 10170. The Advisor's parent company is XShares Group LLC ("XShares
Group"). XShares Group is an early stage financial services company specializing
in the development of innovative financial products and investment strategies.
Amerivest Investment Management, LLC ("Amerivest") serves as a sub-advisor to
the Funds. Amerivest is located at 1005 North Ameritrade Place, Bellevue,
Nebraska 68005, is a Delaware limited liability company and a wholly-owned
subsidiary of TD AMERITRADE Holding Corporation, whose headquarters are located
at 4211 South 102nd Street, Omaha, Nebraska 68127 ("TDAHC"). BNY Investment
Advisors ("BNY") also serves as a sub-advisor to the Funds. BNY is a separate
identifiable division of The Bank of New York, is a New York state banking
corporation, and has its principal office and place of business at 1633
Broadway, 13th Floor, New York, NY 10019 (Amerivest and BNY are each referred to
as a "Sub-Advisor" and, together, the "Sub-Advisors"). As of July 31, 2007, BNY
managed approximately $125 billion in assets. Amerivest did not manage any
assets. Pursuant to separate Sub-Advisory Agreements between the Advisor and
each Sub-Advisor, the Sub-Advisors will be responsible for the day-to-day
management of the Funds, subject to the supervision of the Advisor and the
Funds' Board of Directors. In this regard, the Sub-Advisors will be responsible
for implementing the replication strategy for each Fund with regard to its
Underlying Index and for general administration, compliance and management
services as may be agreed between Advisor and each Sub-Advisor from time to
time.


INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS

        The Advisor serves as the investment advisor to each of the Funds
pursuant to an Investment Advisory Agreement with the Company (the "Advisory
Agreement"). Pursuant to the Advisory Agreement, the Advisor is responsible,
subject to the supervision of the Company's Board for the day-to-day management
of each Fund in accordance with each Fund's investment objectives, policies and
strategies. The Advisor also administers the Company's business affairs,
provides office facilities and equipment and certain clerical, bookkeeping and
administrative services, and permits its officers and employees to serve without
compensation as officers, Directors or employees of the Company. Pursuant to the
Advisory Agreement, the Advisor is authorized to engage one or more sub-advisors
for the performance of any of the services to be


                                      B-24



provided by the Advisor under the Advisory Agreement. Under the Advisory
Agreement, the Advisor is also responsible for arranging sub-advisory, transfer
agency, custody, fund administration and accounting, and other non-distribution
related services necessary for the Funds to operate.


        For the services it provides to the Funds, the Advisor receives a
unified management fee equal to an annual rate of .65% of each Fund's average
daily net assets. The fees are accrued daily and paid monthly. Out of the
management fee, the Advisor pays, or arranges for the payment of, all fees and
expenses of the Sub-Advisors, the Transfer Agent, the Administrator and
Accounting Agent and the Custodian. The Fund is responsible for the payment of
all other expenses associated with its operation, including but not limited to,
brokerage expenses, taxes, interest, fees and expenses of counsel to the Funds,
fees and expenses of the Disinterested Directors (including legal counsel fees),
certain out-of-pocket expenses of the Advisor or Sub-Advisors, including, but
not limited to cost of obtaining prices for security valuations (including
manual broker quotes), Federal Reserve charges related to securities
transactions, postage and insurance on physical transfer items,
telecommunication charges, and proxy voting execution, advice and reporting
etc., fees and expenses of the Chief Compliance Officer and expenses associated
with the Funds' compliance program, litigation expenses, fees and expenses of
the Funds' independent auditors, registration fees, expenses associated with
compliance by the Fund with mandatory regulatory mandates, including those
relating to the development and distribution of its prospectus and shareholder
reports, and extraordinary expenses.


        The Advisor at its discretion may waive its right to any portion of the
advisory fee and may use any portion of this fee for purposes of shareholder and
administrative services. There can be no assurance that such fees will be waived
in the future.


        In accordance with the terms of the Sub-Advisory Agreement with
Amerivest, the Advisor pays Amerivest, out if its own resources, a fee at the
annual rate of .55 of 1% of each Fund's average daily net assets for the first
$5 billion in assets and .60 of 1% of each Fund's average daily net assets in
excess of $5 billion.

        Out of the Sub-Advisory fee, Amerivest pays all fees and expenses of
BNY, the Transfer Agent, Administrator and Accounting Agent and Custodian.
Amerivest has contractually agreed to reduce its fees and/or pay Fund operating
expenses (excluding any front-end or contingent deferred loads, acquired fund
fees and expenses, taxes, leverage interest, brokerage commissions, expenses
incurred in connection with any merger or reorganization, or extraordinary
expenses such as litigation) in order to limit each Fund's Net Annual Operating
Expenses for shares of the Fund to .65% of the Fund's average net assets (the
"Expense Cap"). The Expense Cap will remain in effect until at least September
30, 2008. Amerivest is permitted to be reimbursed for fee reductions and/or
expense payments made in the prior three fiscal years. This reimbursement may be
requested by Amerivest if the aggregate amount actually paid by the Fund toward
operating expenses for such fiscal year (taking into account the reimbursement)
does not exceed the Expense Cap.

        Amerivest pays BNY, out of its own resources, a fee based on a
percentage of the average daily net assets of each Fund as set forth below:



                                      B-25




    o    10 basis points (0.10 %) of the first $100 million in combined daily
         net assets of all Funds; and

    o    5 basis points (0.05%) of the combined daily net assets of all Funds
         in excess of $100 million.

    There is a minimum annual fee of $ 35,000 per Fund.

        The Advisory Agreement and Sub-Advisory Agreements between the Advisor
and each Sub-Advisor, with respect to each Fund, were initially approved by the
Board on July 24, 2007. The Advisory Agreement and each Sub-Advisory Agreement,
with respect to each Fund, continue in effect for two years from its effective
date and may be continued in effect annually thereafter if such continuance is
approved by (i) the Board, or (ii) a majority (as defined in the 1940 Act) of
the outstanding voting securities of each applicable Fund, provided that in
either case the continuance is also approved by a majority of the Disinterested
Directors, by a vote cast in person at a meeting called for the purpose of
voting on such continuance. The Advisory Agreement and Sub-Advisory Agreements
are each terminable without penalty by the Company with respect to one or more
of the Funds on 60 days written notice when authorized either by majority vote
of its outstanding voting shares or by a vote of a majority of its Board
(including a majority of the Disinterested Directors), or by the Advisor or each
Sub-Advisor (as applicable) on 60 days written notice, and will automatically
terminate in the event of its assignment. Each of the Advisory Agreement and
Sub-Advisory Agreements provide that in the absence of willful misfeasance, bad
faith or gross negligence on the part of the Advisor or respective Sub-Advisor,
or of reckless disregard by each of them of their obligations thereunder, the
Advisor and the respective Sub-Advisor shall not be liable for any action or
failure to act in accordance with its duties thereunder.


PORTFOLIO MANAGERS


        Set forth below is additional information regarding the individuals
identified in the Prospectus as primarily responsible for the day-to-day
management of the Funds ("Portfolio Managers").

        As of July 31, 2007, the separate division of the Sub-Advisor called the
Index Fund Management Division that manages the Funds also managed seven (7)
other registered investment companies with approximately $2.1 billion in assets;
ten (10) pooled investment vehicles with approximately $6.8 billion in assets
and one hundred and five (105) other accounts with approximately $14.9 billion
in assets. Each of the portfolios or accounts managed by the Portfolio Managers
in BNY's Index Fund Management Division are index funds which therefore seek to
track the rate of return, risk profile and other characteristics of an index by
either replicating the same combination of securities that compose that index or
through a representative sampling of the securities that compose that benchmark
based on objective criteria and data. The Portfolio Managers are required to
manage each portfolio or account to meet those objectives. The Portfolio
Managers in BNY's Index Fund Management Division manages these other accounts as
a team.



                                      B-26




        As of July 31, 2007, Ivo Ivanov did not have primary responsibility for
the day-to-day management of any other registered investment companies, pooled
investment vehicles, or other accounts.


Portfolio Manager Compensation


        As of July 31, 2007, BNY's Portfolio Managers' compensation generally
consists of base salary, bonus, and various long-term incentive compensation
vehicles, if eligible. In addition, the Portfolio Managers are eligible for the
standard retirement benefits and health and welfare benefits available to all
BNY employees. In the case of Portfolio Managers who are also responsible for
managing managed accounts other than the Funds, the method used to determine
their compensation is the same for all Funds and investment accounts. A
Portfolio Manager's base salary is determined by the manager's experience and
performance in the role, taking into account the ongoing compensation benchmark
analyses performed by BNY's Human Resources Department. A Portfolio Manager's
base salary is generally a fixed amount that may change as a result of periodic
reviews, upon assumption of new duties, or when a market adjustment of the
position occurs. A Portfolio Manager's bonus is determined by a number of
factors. One factor is gross, pre-tax performance of a fund relative to
expectations for how the fund should have performed, given its objectives,
policies, strategies and limitations, and the market environment during the
measurement period. This performance factor is not based on the value of assets
held in a Fund's portfolio. Additional factors include the Portfolio Manager's
contributions to the investment management functions within the sub-asset class,
contributions to the development of other investment professionals and
supporting staff, and overall contributions to strategic planning and decisions
for the investment group. The bonus is paid on an annual basis.

        As of July 31, 2007, Ivo Ivanov's compensation generally consists of a
base salary and a quarterly bonus. His base salary is a fixed amount that may
change as a result of periodic reviews, upon assumption of new duties or when
the competitive forces in the employment marketplace call for such an
adjustment. The size of his quarterly bonus depends on several factors,
including (i) the operating results of TDAHC, (ii) the operating results of Mr.
Ivanov's business unit and (iii) his individual performance relative to a number
of standards as set by TDAHC from time to time.


Potential Conflicts of Interest


        The BNY Portfolio Managers for each Fund manage multiple portfolios for
multiple clients. These accounts may include investment companies, separate
accounts (assets managed on behalf of individuals and institutions such as
pension funds, insurance companies and foundations), and bank collective and
common trust accounts. Each BNY Portfolio Manager generally manages portfolios
having substantially the same investment style as the relevant Fund. However,
the portfolios managed by a BNY Portfolio Manager may not have portfolio
compositions identical to those of the Fund(s) managed by the BNY Portfolio
Manager due, for example, to specific investment limitations or guidelines
present in some portfolio or Funds but not others. The BNY Portfolio Managers
may purchase securities for one portfolio and not another portfolio, and the
performance of securities purchased for one portfolio may vary from the
performance of securities purchased for other portfolios. A BNY Portfolio
Manager may place transactions on behalf of other accounts that are directly or
indirectly contrary to



                                      B-27




investment decisions made on behalf of a Fund, or make investment decisions that
are similar to those made for a Fund, both of which have the potential to
adversely impact the Fund depending on market conditions. For example, a BNY
Portfolio Manager may purchase a security in one portfolio while appropriately
selling that same security in another portfolio. In addition, some of these
portfolios have fee structures that are or have the potential to be higher than
the sub-advisory fees paid to each Sub-Advisor. However, the compensation
structure for BNY Portfolio Managers generally does not provide any incentive to
favor one account over another because that part of a manager's bonus based on
performance is not based on the performance of one account to the exclusion of
others.

        The Company does not believe that Mr. Ivo Ivanov is subject to any
conflict of interest in connection with his management of the Funds as Mr.
Ivanov does not have primary responsibility for the day-to-day management of any
other accounts or funds.


DISTRIBUTOR


        ALPS Distributors, Inc., a Colorado corporation with principal offices
at 1290 Broadway, Suite 1100, Denver, Colorado, serves as the distributor of
Creation Units for each Fund on an agency basis (the "Distributor"). The
Distributor has entered into a Distribution Agreement with the Company pursuant
to which it distributes the shares of the Funds. Shares are continuously offered
for sale by the Distributor only in Creation Unit Aggregations. Fund shares in
less than Creation Unit Aggregations are not distributed by the Distributor.


        Under the Distribution Agreement, the Distributor, for nominal
consideration (i.e., $1.00) and as agent for the Funds, will solicit orders for
the purchase of the Funds' shares, provided that any subscriptions and orders
will not be binding on the Funds until accepted by the Funds. The Distributor
will deliver Prospectuses and, upon request, Statements of Additional
Information to persons purchasing Creation Unit Aggregations and will maintain
records of orders placed with it. The Distributor is a broker-dealer registered
under the Securities Exchange Act of 1934 (the "Exchange Act") and a member of
the National Association of Securities Dealers, Inc. ("NASD").

        The Distributor may also enter into agreements with securities dealers
("Soliciting Dealers") who will solicit purchases of Creation Unit Aggregations
of Fund shares. Such Soliciting Dealers may also be Participating Organizations
(as discussed in "Procedures for Creation of Creation Unit Aggregations" below)
or DTC participants (as defined below).


        The Distribution Agreement was initially approved by the Board on July
24, 2007. The Distribution Agreement continues in effect for two years from its
effective date and may be continued in effect annually thereafter if such
continuance is approved by (i) the Board, or (ii) a majority (as defined in the
1940 Act) of the outstanding voting securities of each applicable Fund, provided
that in either case the continuance is also approved by a majority of the
Disinterested Directors, by a vote cast in person at a meeting called for the
purpose of voting on such continuance. The Distribution Agreement is terminable
without penalty by the Company with respect to one or more of the Funds on 60
days written notice when authorized either by majority vote of its outstanding
voting shares or by a vote of a majority of its Board (including a majority of
the Disinterested Directors), or by the Distributor on 60 days written notice,
and will



                                      B-28



automatically terminate in the event of its assignment. The Distribution
Agreement provides that in the absence of willful misfeasance, bad faith or
gross negligence on the part of the Distributor, or of reckless disregard by it
of its obligations thereunder, the Distributor shall not be liable for any
action or failure to act in accordance with its duties thereunder.

ADMINISTRATOR AND ACCOUNTING AGENT

        The Bank of New York Company, Inc. ("BONY") serves as Administrator and
accounting agent for the Funds. Its principal address is 101 Barclay Street, New
York, New York 10286.

        BONY serves as Administrator and Accounting Agent for the Funds pursuant
to an Administration and Accounting Agreement. Under the Administration and
Accounting Agreement, BONY is obligated on a continuous basis, to provide
certain administration, valuation, accounting and computational services
necessary for the proper administration of the Company and each Fund. As Fund
Accountant, BONY holds the Funds' assets, calculates the net asset value of
Shares and calculates net income and realized capital gains or losses. Pursuant
to the Administration and Accounting Agreement, the Company has agreed to
indemnify BONY for certain liabilities, including certain liabilities arising
under the federal securities laws, unless such loss or liability results from
negligence or willful misconduct in the performance of its duties.

CUSTODIAN AND TRANSFER AGENT

        BONY, 101 Barclay Street, New York, New York 10286 also serves as
custodian for the Funds pursuant to a Custodian Agreement. BONY also serves as
transfer agent of the Funds pursuant to a Transfer Agency Agreement. BONY may be
reimbursed by the Funds for its out-of-pocket expenses.

LEGAL COUNSEL

        Paul, Hastings, Janofsky & Walker LLP, 75 East 55th Street, New York,
New York 10022, serves as legal counsel to the Funds.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING COMPANY


        Eisner LLP serves as the Funds' independent registered public accounting
firm. The independent registered public accounting firm audits the Funds' annual
financial statements and provides other related services.


             V. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES


        As of August 20, 2007, the officers and Directors, as a group, owned
beneficially less than 1% of the shares of any of the Funds.

        As of August 20, 2007, no shareholder owned of record, 5% or more of the
outstanding shares of a Fund.



                                      B-29



                               VI. CODE OF ETHICS

        The Company, the Advisor, the Sub-Advisors and the Distributor have each
adopted codes of ethics pursuant to Rule 17j-1 of the 1940 Act. These codes of
ethics restrict the personal securities transactions of access persons, as
defined in the codes, of the Funds in securities that may be purchased or held
by the Funds to ensure that such investments do not disadvantage the Funds. The
codes of ethics for the Company, the Advisor, the Sub-Advisors and the
Distributor are filed as exhibits to the Funds' registration statement and
instructions concerning how these documents can be obtained may be found on the
back cover of the Funds' Prospectus.

                           VII. PROXY VOTING POLICIES


        The Board of Directors has delegated the responsibility to vote proxies
for securities held in the Funds' portfolios to BNY, subject to the Advisor's
and Board's oversight. BNY's proxy voting policies, attached as Appendix A, are
reviewed periodically, and, accordingly are subject to change. Each Fund's
voting record relating to portfolio securities for the 12-month period ended
July 31, 2008, may be obtained on the Fund's website at www.tdaxfunds.com and on
the SEC's website at http://www.sec.gov.


          VIII. PORTFOLIO HOLDINGS DISCLOSURE POLICIES AND PROCEDURES

        The Company's Board of Directors has adopted a policy regarding the
disclosure of information about the Funds' portfolio securities. The Funds'
portfolio holdings are publicly disseminated each day the Funds are open for
business through financial reporting and news services including publicly
available internet web sites. In addition, a basket composition file, which
includes the security names and share quantities required to be delivered in
exchange for Fund shares, together with estimates and actual cash components, is
publicly disseminated daily prior to the opening of the NYSE via the National
Securities Clearing Corporation ("NSCC"). The basket represents one Creation
Unit of the applicable Fund.

                           IX. PORTFOLIO TRANSACTIONS

        The policy of the Company regarding purchases and sales of securities
for the Funds is that primary consideration will be given to obtaining "best
execution" of transaction at commission rates that are reasonable in relation to
the value of brokerage services obtained. Consistent with this policy, when
securities transactions are effected on a stock exchange, the Company's policy
is to pay commissions which are considered fair and reasonable without
necessarily determining that the lowest possible commissions are paid in all
circumstances. In seeking to determine the reasonableness of brokerage
commissions paid in any transaction, the Advisor and each Sub-Advisor rely upon
their experience and knowledge regarding commissions generally charged by
various brokers and on their judgment in evaluating the brokerage services
received from the broker effecting the transaction. Such determinations are
necessarily subjective and imprecise, as in most cases, an exact dollar value
for those services is not ascertainable.

        The Advisor and Sub-Advisors owe a fiduciary duty to their clients to
obtain best execution on trades effected. "Best execution" does not necessarily
mean that only brokers


                                      B-30



offering the lowest available commission rate will be selected to execute
transactions. In determining "best execution," the full range of brokerage
services applicable to a particular transaction may be considered, which may
include, but is not limited to: liquidity, price, commission, timing, aggregated
trades, capable floor brokers or traders, competent block trading coverage,
ability to position, capital strength and stability, reliable and accurate
communications and settlement processing, use of automation, knowledge of other
buyers or sellers, arbitrage skills, administrative ability, underwriting and
provision of information on a particular security or market in which the
transaction is to occur. The specific criteria will vary depending upon the
nature of the transaction, the market in which it is executed, and the extent to
which it is possible to select form among multiple broker/dealers. The Advisor
and Sub-Advisors will also use ECNs when appropriate.

        The Advisor and Sub-Advisors do not presently participate in any soft
dollar arrangements. They may, however, aggregate trades with clients of a
Sub-Advisor, whose commission dollars are used to generate soft dollar credits.
Although the Company's commissions are not used for soft dollars, the Company
may benefit from the soft dollar products/services received by a Sub-Advisor.

        The Advisor and Sub-Advisors assume general supervision over placing
orders on behalf of the Company for the purchase or sale of portfolio
securities. If purchases or sales of portfolio securities of the Company and one
or more other clients of the Advisor or Sub-Advisors are considered at or about
the same time, transactions in such securities are allocated among the several
clients in a manner deemed equitable and consistent with its fiduciary
obligations to all by the Advisor and Sub-Advisors. In some cases, this
procedure could have a detrimental effect on the price or volume of the security
so far as the Company is concerned. However, in other cases, it is possible that
the ability to participate in volume transactions and to negotiate lower
brokerage commissions will be beneficial to the Company.

        Portfolio turnover may vary from year to year, as well as within a year.
High turnover rates are likely to result in comparatively greater brokerage
expenses. The portfolio turnover rate for each Fund may exceed 100%. The overall
reasonableness of brokerage commissions is evaluated by the Advisor and each
Sub-Advisor based upon its knowledge of available information as to the general
level of commission paid by other institutional investors for comparable
services.

                                 X. SHARE PRICE

NET ASSET VALUE

        Each Fund's share price, called its net asset value, or NAV, is
calculated each business day as of the close of regular trading on the NYSE,
generally 4:00 p.m., Eastern Time. NAV per share is computed by dividing the net
assets allocated to each share class by the number of Fund shares outstanding
for that class.


           XI. INFORMATION ABOUT TDAX INDEPENDENCE TARGET DATE SHARES


        Each Fund offers and issues an exchange-traded class of shares called
TDAX Independence Target Date Shares. Each Fund issues and redeems TDAX
Independence Target


                                      B-31




Date Shares in large lots, known as "Creation Units." To purchase or redeem a
Creation Unit, you must be a Participating Organization or you must do so
through a broker that is a Participating Organization. A Participating
Organization is either a member of the Continuous Net Settlement System of the
National Securities Clearing Corporation (NSCC) or a participant in the
Depository Trust Company (DTC) that has executed a Participant Agreement with
the Funds' Distributor.


        Each Fund issues Creation Units in kind, in exchange for a basket of
stocks that are part of the Fund's Underlying Index (Deposit Securities). Each
Fund also redeems Creation Units in kind; an investor who tenders a Creation
Unit will receive, as redemption proceeds, a basket of stocks that are part of a
Fund's portfolio holdings (Redemption Securities). The Deposit Securities and
the Redemption Securities will usually, but may not necessarily always, be the
same. As part of any creation or redemption transaction, the investor will
either pay or receive some cash in addition to the securities, as described more
fully below. Each Fund reserves the right to issue Creation Units for cash,
rather than in kind, although each has no current intention of doing so.


ADDITIONAL INFORMATION ABOUT THE UNDERLYING INDEX AND THE INDEX ADMINISTRATOR

        Based on its own proprietary intellectual model, Zacks has established
specific criteria for determining which securities will represent each of the
three broad asset classes and therefore eligible for inclusion in the Underlying
Indexes (the "Index Methodology"). Each Underlying Index will be administered by
Zacks, which also serves as Index Administrator. As Index Administrator, Zacks
will employ the Index Methodology to determine the composition of each
Underlying Index. Mergent, Inc. acts as "index calculation agent" in connection
with the calculation and dissemination of each Underlying Index. Each Underlying
Index is compiled, maintained and calculated without regard to the Advisor,
Sub-Advisors, or Distributor. The Index Administrator has no obligation to take
the specific needs of the Advisor, Sub-Advisors or Distributor into account in
the determination and calculation of the Underlying Index.

        It is expected that each Underlying Index will be available through
major market data vendors as a result of dissemination to the Consolidated
Association by the NYSE. The NYSE is not affiliated with the Company, the Funds,
the Advisor, the Sub-Advisors or the Distributor. Each Fund is entitled to use
its respective Underlying Index pursuant to a licensing agreement between Zacks
and Sub-Advisor, Amerivest Investment Management, LLC and a sub-licensing
agreement between Amerivest and the Advisor. There is no charge to the Funds in
connection with these licensing agreements.


EXCHANGE LISTING AND TRADING


        Each Fund's TDAX Independence Target Date Shares have been approved for
listing on the NYSE and will trade on the NYSE at market prices that may differ
from net asset value. The only relationship that the NYSE has with the Advisor,
the Sub-Advisors, the Distributor or the Company in connection with the Funds is
that the NYSE lists the TDAX Independence Target Date Shares pursuant to its
listing agreement with the Company. The NYSE has no obligation or liability in
connection with the administration, marketing or trading of the Funds.



                                      B-32




        There can be no assurance that, in the future, a Fund's TDAX
Independence Target Date Shares will continue to meet all of the NYSE's listing
requirements. The NYSE may, but is not required to, delist a Fund's TDAX
Independence Target Date Shares if: (1) following the initial 12-month period
beginning upon the commencement of trading, there are fewer than 50 beneficial
owners of a Fund's TDAX Independence Target Date Shares for 30 or more
consecutive trading days; (2) the value of the Underlying Index related to the
Fund is no longer calculated or available; or (3) such other event shall occur
or condition exist that, in the opinion of the NYSE, makes further dealings on
the NYSE inadvisable. The NYSE will also delist a Fund's TDAX Independence
Target Date Shares upon termination of a Fund's TDAX Independence Target Date
Shares class.


        As with any stock traded on an exchange, purchases and sales of a Fund's
TDAX Independence Target Date Shares will be subject to usual and customary
brokerage commissions. The Company reserves the right to adjust the price levels
of the TDAX Independence Target Date Shares (but not their value) in the future
to help maintain convenient trading ranges for investors. Any adjustments would
be accomplished through stock splits or reverse stock splits, and would have no
effect on the net assets of a Fund.

BOOK ENTRY ONLY SYSTEM


        DTC acts as securities depositary for the TDAX Independence Target Date
Shares. TDAX Independence Target Date Shares are registered in the name of the
DTC or its nominee, Cede & Co., and deposited with, or on behalf of, DTC. Except
in limited circumstances set forth below, certificates will not be issued for
TDAX Independence Target Date Shares. DTC is a limited-purpose trust company
that was created to hold securities of its participants (the DTC Participants)
and to facilitate the clearance and settlement of securities transactions among
the DTC Participants in such securities through electronic book-entry changes in
accounts of the DTC Participants, thereby eliminating the need for physical
movement of securities certificates. DTC Participants include securities brokers
and dealers, banks, trust companies, clearing corporations and certain other
organizations, some of whom (and/or their representatives) own DTC. More
specifically, DTC is owned by a number of its DTC Participants and by the NYSE,
the NYSE and the NASD. Access to the DTC system is also available to others such
as banks, brokers, dealers, and trust companies that clear through or maintain a
custodial relationship with a DTC Participant, either directly or indirectly
(the "Indirect Participants").

        Beneficial ownership of TDAX Independence Target Date Shares is limited
to DTC Participants, Indirect Participants, and persons holding interests
through DTC Participants and Indirect Participants. Ownership of beneficial
interests in TDAX Independence Target Date Shares (owners of such beneficial
interests are referred to herein as "Beneficial Owners") is shown on, and the
transfer of ownership is effected only through, records maintained by DTC (with
respect to DTC Participants) and on the records of DTC Participants (with
respect to Indirect Participants and Beneficial Owners that are not DTC
Participants). Beneficial Owners will receive from or through the DTC
Participant a written confirmation relating to their purchase of TDAX
Independence Target Date Shares.

        Each Fund recognizes DTC or its nominee as the record owner of all TDAX
Independence Target Date Shares for all purposes. Beneficial Owners of TDAX
Independence



                                      B-33




Target Date Shares are not entitled to have TDAX Independence Target Date Shares
registered in their names, and will not receive or be entitled to physical
delivery of share certificates. Each Beneficial Owner must rely on the
procedures of DTC and any DTC Participant and/or Indirect Participant through
which such Beneficial Owner holds its interests, to exercise any rights of a
holder of TDAX Independence Target Date Shares.

        Conveyance of all notices, statements, and other communications to
Beneficial Owners is effected as follows. DTC will make available to the Company
upon request and for a fee a listing of the TDAX Independence Target Date Shares
of each Fund held by each DTC Participant. The Company shall obtain from each
such DTC Participant the number of Beneficial Owners holding TDAX Independence
Target Date Shares, directly or indirectly, through such DTC Participant. The
Company shall provide each such DTC Participant with copies of such notice,
statement, or other communication, in such form, number and at such place as
such DTC Participant may reasonably request, in order that such notice,
statement or communication may be transmitted by such DTC Participant, directly
or indirectly, to such Beneficial Owners. In addition, the Company shall pay to
each such DTC Participant a fair and reasonable amount as reimbursement for the
expenses attendant to such transmittal, all subject to applicable statutory and
regulatory requirements.

        Share distributions shall be made to DTC or its nominee as the
registered holder of all TDAX Independence Target Date Shares. DTC or its
nominee, upon receipt of any such distributions, shall credit immediately DTC
Participants' accounts with payments in amounts proportionate to their
respective beneficial interests in TDAX Independence Target Date Shares of the
appropriate Fund as shown on the records of DTC or its nominee. Payments by DTC
Participants to Indirect Participants and Beneficial Owners of TDAX Independence
Target Date Shares held through such DTC Participants will be governed by
standing instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or registered in a
"street name," and will be the responsibility of such DTC Participants.

        The Company has no responsibility or liability for any aspect of the
records relating to or notices to Beneficial Owners, or payments made on account
of beneficial ownership interests in such TDAX Independence Target Date Shares,
or for maintaining, supervising, or reviewing any records relating to such
beneficial ownership interests, or for any other aspect of the relationship
between DTC and the DTC Participants or the relationship between such DTC
Participants and the Indirect Participants and Beneficial Owners owning through
such DTC Participants.

        DTC may determine to discontinue providing its service with respect to
TDAX Independence Target Date Shares at any time by giving reasonable notice to
the Company and discharging its responsibilities with respect thereto under
applicable law. Under such circumstances, the Company shall take action either
to find a replacement for DTC to perform its functions at a comparable cost or,
if such replacement is unavailable, to issue and deliver printed certificates
representing ownership of TDAX Independence Target Date Shares, unless the
Company makes other arrangements with respect thereto satisfactory to the NYSE
(or such other exchange on which TDAX Independence Target Date Shares may be
listed).



                                      B-34




PURCHASE AND ISSUANCE OF TDAX INDEPENDENCE TARGET DATE SHARES IN CREATION UNITS

        The Funds issue and sell TDAX Independence Target Date Shares only in
Creation Units on a continuous basis through the Distributor, without a sales
load, at their net asset value next determined after receipt, on any Business
Day, of an order in proper form. The Funds will not issue fractional Creation
Units. A Business Day is any day on which the NYSE is open for business.


FUND DEPOSIT

        The consideration for purchase of a Creation Unit from a Fund generally
consists of the in kind deposit of a designated portfolio of equity securities
(the Deposit Securities) per each Creation Unit Aggregation constituting a
substantial replication of the stocks included in the Underlying Index and an
amount of cash (the Cash Component) consisting of a Balancing Amount (described
below) and a Transaction Fee (also described below). Together, the Deposit
Securities and the Cash Component constitute the Fund Deposit.

        The Balancing Amount is an amount equal to the difference between the
net asset value (NAV) of a Creation Unit and the market value of the Deposit
Securities (the "Deposit Amount"). It ensures that the NAV of a Fund Deposit
(not including the Transaction Fee) is identical to the NAV of the Creation Unit
it is used to purchase. If the Balancing Amount is a positive number (i.e., the
NAV per Creation Unit exceeds the market value of the Deposit Securities), then
that amount will be paid by the purchaser to the Fund in cash. If the Balancing
Amount is a negative number (i.e., the NAV per Creation Unit is less than the
market value of the Deposit Securities), then that amount will be paid by the
Fund to the purchaser in cash (except as offset by the Transaction Fee,
described below).


        The Company, through the NSCC (discussed below), makes available on each
Business Day, immediately prior to the opening of business on the NYSE
(currently 9:30 a.m., Eastern Time), a list of the names and the required number
of shares of each Deposit Security to be included in the current Fund Deposit
for each Fund (based on information at the end of the previous Business Day).
The Fund Deposit is applicable, subject to any adjustments as described below,
in order to effect purchases of Creation Units of a Fund until such time as the
next-announced Fund Deposit composition is made available. Each Fund reserves
the right to accept a nonconforming Fund Deposit.


        The identity and number of shares of the Deposit Securities required for
a Fund Deposit may change to reflect rebalancing adjustments and corporate
actions by a Fund, or in response to adjustments to the weighting or composition
of the component stocks of the Underlying Index. In addition, the Company
reserves the right to permit or require the substitution of an amount of
cash--i.e., a "cash in lieu" amount--to be added to the Cash Component to
replace any Deposit Security that may not be available in sufficient quantity
for delivery, may not be eligible for transfer through the Clearing Process
(discussed below), or may not be eligible for trading by a Participating
Organization (as defined below) or the investor for which a Participating
Organization is acting. Brokerage commissions incurred in connection with
acquisition of Deposit Securities not eligible for transfer through the systems
of DTC and hence not eligible for


                                      B-35



transfer through the Clearing Process (discussed below) will be an expense of
the Fund. However, the Advisor, subject to the approval of the Board of
Directors, may adjust the Transaction Fee (described below) to protect existing
shareholders from this expense.

        In addition to the list of names and numbers of securities constituting
the current Deposit Securities, the Company, through the NSCC, also makes
available on each Business Day, the estimated Cash Component, effective through
and including the previous Business Day, per outstanding Creation Unit of the
Fund. All questions as to the number of shares of each security in the Deposit
Securities and the validity, form, eligibility, and acceptance for deposit of
any securities to be delivered shall be determined by the appropriate Fund, and
the Fund's determination shall be final and binding.

PROCEDURES FOR CREATION OF CREATION UNITS

        To be eligible to place orders with the Distributor and to purchase
Creation Units from a Fund, you must be (i) a Participating Organization, i.e.,
a broker dealer or other participant in the clearing process through the
Continuous Net Settlement System of the NSCC (the "Clearing Process"), a
clearing agency that is registered with the SEC, or (ii) a DTC Participant, and
in each case, must have executed an agreement with the Distributor governing the
purchase and redemption of Creation Units (the Participant Agreement). A
Participating Organization and DTC Participant are collectively referred to as
an "Authorized Participant." Investors should contact the Distributor for the
names of Authorized Participants that have signed a Participation Agreement. All
Fund Shares, however created, will be entered on the records of DTC in the name
of Cede & Co. for the account of a DTC Participant.


        All orders to create Creation Unit Aggregations, whether through the
Clearing Process (through a Participating Party) or outside the Clearing Process
(through a DTC Participant), must be received by the Distributor no later than
the closing time of the regular trading session on the NYSE ("Closing Time")
(ordinarily 4:00 p.m., Eastern Time) in each case on the date such order is
placed in order for creation of Creation Unit Aggregations to be effected based
on the NAV of Shares of the Fund as next determined on such date after receipt
of the order in proper form. In the case of custom orders, the order must be
received by the Distributor no later than 3:00 p.m. Eastern Time on the trade
date. A custom order may be placed by an Authorized Participant in the event
that the Company permits or requires the substitution of an amount of cash to be
added to the Cash Component to replace any Deposit Security which may not be
available in sufficient quantity for delivery or which may not be eligible for
trading by such Authorized Participant or the investor for which it is acting or
other relevant reason. The date on which an order to create Creation Unit
Aggregations (or an order to redeem Creation Unit Aggregations, as discussed
below) is placed is referred to as the "Transmittal Date." Orders must be
transmitted by an Authorized Participant by telephone or other transmission
method acceptable to the Distributor pursuant to procedures set forth in the
Participant Agreement, as described below (see the Placement of Creation Orders
Using Clearing Process and the Placement of Creation Orders Outside Clearing
Process sections). Severe economic or market disruptions or changes, or
telephone or other communication failure may impede the ability to reach the
Distributor or an Authorized Participant.



                                      B-36



        All orders from investors who are not Authorized Participants to create
Creation Unit Aggregations shall be placed with an Authorized Participant, as
applicable, in the form required by such Authorized Participant. In addition,
the Authorized Participant may request the investor to make certain
representations or enter into agreements with respect to the order, e.g., to
provide for payments of cash, when required. Investors should be aware that
their particular broker may not have executed a Participant Agreement and that,
therefore, orders to create Creation Unit Aggregations of a Fund have to be
placed by the investor's broker through an Authorized Participant that has
executed a Participant Agreement. In such cases there may be additional charges
to such investor. At any given time, there may be only a limited number of
broker-dealers that have executed a Participant Agreement. Those placing orders
for Creation Unit Aggregations through the Clearing Process should afford
sufficient time to permit proper submission of the order to the Distributor
prior to the Closing Time on the Transmittal Date. Orders for Creation Unit
Aggregations that are effected outside the Clearing Process are likely to
require transmittal by the DTC Participant earlier on the Transmittal Date than
orders effected using the Clearing Process. Those persons placing orders outside
the Clearing Process should ascertain the deadlines applicable to DTC and the
Federal Reserve Bank wire system by contacting the operations department of the
broker or depository institution effectuating such transfer of Deposit
Securities and Cash Component.

        Placement of Creation Orders Using Clearing Process. The Clearing
Process is the process of creating or redeeming Creation Unit Aggregations
through the Continuous Net Settlement System of the NSCC. Fund Deposits made
through the Clearing Process must be delivered through a Participating Party
that has executed a Participant Agreement. The Participant Agreement authorizes
the Distributor to transmit through the Custodian to NSCC, on behalf of the
Participating Party, such trade instructions as are necessary to effect the
Participating Party's creation order. Pursuant to such trade instructions to
NSCC, the Participating Party agrees to deliver the requisite Deposit Securities
and the Cash Component to the Company, together with such additional information
as may be required by the Distributor. An order to create Creation Unit
Aggregations through the Clearing Process is deemed received by the Distributor
on the Transmittal Date if (i) such order is received by the Distributor not
later than the Closing Time on such Transmittal Date, and (ii) all other
procedures set forth in the Participant Agreement are properly followed.


        Placement of Creation Orders Outside Clearing Process. Fund Deposits
made outside the Clearing Process must be delivered through a DTC Participant
that has executed a Participant Agreement with the Distributor. A DTC
Participant who wishes to place an order creating Creation Unit Aggregations to
be effected outside the Clearing Process does not need to be a Participating
Party, but such orders must state that the DTC Participant is not using the
Clearing Process and that the creation of Creation Unit Aggregations will
instead be effected through a transfer of securities and cash directly through
DTC. The Fund Deposit transfer must be ordered by the DTC Participant on the
Transmittal Date in a timely fashion so as to ensure the delivery of the
requisite number of Deposit Securities through DTC to the account of the Fund by
no later than 11:00 a.m., Eastern Time, of the next Business Day immediately
following the Transmittal Date.

        All questions as to the number of Deposit Securities to be delivered,
and the validity, form and eligibility (including time of receipt) for the
deposit of any tendered securities, will be



                                      B-37



determined by the Company, whose determination shall be final and binding. The
amount of cash equal to the Cash Component must be transferred directly to the
Custodian through the Federal Reserve Bank wire transfer system in a timely
manner so as to be received by the Custodian no later than 2:00 p.m., Eastern
Time, on the next Business Day immediately following such Transmittal Date. An
order to create Creation Unit Aggregations outside the Clearing Process is
deemed received by the Distributor on the Transmittal Date if (i) such order is
received by the Distributor not later than the Closing Time on such Transmittal
Date; and (ii) all other procedures set forth in the Participant Agreement are
properly followed. However, if the Custodian does not receive both the required
Deposit Securities and the Cash Component by 11:00 a.m. and 2:00 p.m.,
respectively, on the next Business Day immediately following the Transmittal
Date, such order will be canceled. Upon written notice to the Distributor, such
canceled order may be resubmitted the following Business Day using a Fund
Deposit as newly constituted to reflect the then current Deposit Securities and
Cash Component. The delivery of Creation Unit Aggregations so created will occur
no later than the third (3rd) Business Day following the day on which the
purchase order is deemed received by the Distributor.

        Additional transaction fees may be imposed with respect to transactions
effected outside the Clearing Process (through a DTC participant) and in the
limited circumstances in which any cash can be used in lieu of Deposit
Securities to create Creation Units. (See Creation Transaction Fee section
below).


        Creation Unit Aggregations may be created in advance of receipt by the
Company of all or a portion of the applicable Deposit Securities as described
below. In these circumstances, the initial deposit will have a value greater
than the NAV of the Fund Shares on the date the order is placed in proper form
since, in addition to available Deposit Securities, cash must be deposited in an
amount equal to the sum of (i) the Cash Component, plus (ii) 105% of the market
value of the undelivered Deposit Securities (the "Additional Cash Deposit"). The
order shall be deemed to be received on the Business Day on which the order is
placed provided that the order is placed in proper form prior to 4:00 p.m.,
Eastern Time, on such date, and federal funds in the appropriate amount are
deposited with the Custodian by 11:00 a.m., Eastern Time, the following Business
Day. If the order is not placed in proper form by 4:00 p.m. or federal funds in
the appropriate amount are not received by 11:00 a.m. the next Business Day,
then the order may be deemed to be canceled and the Authorized Participant shall
be liable to the Fund for losses, if any, resulting therefrom. An additional
amount of cash shall be required to be deposited with the Company, pending
delivery of the missing Deposit Securities to the extent necessary to maintain
the Additional Cash Deposit with the Company in an amount at least equal to 115%
of the daily marked to market value of the missing Deposit Securities. To the
extent that missing Deposit Securities are not received by 1:00 p.m., Eastern
Time, on the third Business Day following the day on which the purchase order is
deemed received by the Distributor or in the event a marked-to-market payment is
not made within one Business Day following notification by the Distributor that
such a payment is required, the Company may use the cash on deposit to purchase
the missing Deposit Securities. Authorized Participants will be liable to the
Company and Fund for the costs incurred by the Company in connection with any
such purchases. These costs will be deemed to include the amount by which the
actual purchase price of the Deposit Securities exceeds the market value of such
Deposit Securities on the day the purchase order was deemed received by the
Distributor plus the brokerage and related transaction costs associated with
such purchases. The Company will return any unused portion of the Additional
Cash



                                      B-38



Deposit once all of the missing Deposit Securities have been properly received
by the Custodian or purchased by the Company and deposited into the Company. In
addition, a transaction fee, as listed below, will be charged in all cases. The
delivery of Creation Unit Aggregations so created will occur no later than the
third Business Day following the day on which the purchase order is deemed
received by the Distributor.

        Acceptance of Orders for Creation Unit Aggregations. The Company
reserves the absolute right to reject a creation order transmitted to it by the
Distributor in respect of a Fund if: (i) the order is not in proper form; (ii)
the investor(s), upon obtaining the Fund Shares ordered, would own 80% or more
of the currently outstanding shares of any Fund; (iii) the Deposit Securities
delivered are not as disseminated for that date by the Custodian, as described
above; (iv) acceptance of the Deposit Securities would have certain adverse tax
consequences to the Fund; (v) acceptance of the Fund Deposit would, in the
opinion of counsel, be unlawful; (vi) acceptance of the Fund Deposit would
otherwise, in the discretion of the Company or the Advisor, have an adverse
effect on the Company or the rights of beneficial owners; or (vii) in the event
that circumstances outside the control of the Company, the Custodian, the
Distributor and the Advisor make it, for all practical purposes, impossible to
process creation orders. Examples of such circumstances include acts of God;
public service or utility problems such as fires, floods, extreme weather
conditions and power outages resulting in telephone, telecopy and computer
failures; market conditions or activities causing trading halts; systems
failures involving computer or other information systems affecting the Company,
the Advisor, the Distributor, DTC, NSCC, the Custodian or sub-custodian or any
other participant in the creation process, and similar extraordinary events. The
Distributor shall notify a prospective creator of a Creation Unit and/or the
Authorized Participant acting on behalf of such prospective creator of its
rejection of the order of such person. The Company, the Custodian, any
sub-custodian and the Distributor are under no duty, however, to give
notification of any defects or irregularities in the delivery of Fund Deposits
nor shall any of them incur any liability for the failure to give any such
notification.

        All questions as to the number of shares of each security in the Deposit
Securities and the validity, form, eligibility, and acceptance for deposit of
any securities to be delivered shall be determined by the Company, and the
Company's determination shall be final and binding.

        Creation Transaction Fee. To compensate the Company for transfer and
other transaction costs involved in creation transactions through the Clearing
Process, investors will be required to pay a fixed creation transaction fee,
described below, payable to the Company regardless of the number of creations
made each day, An additional charge of up to three (3) times the fixed
transaction fee (expressed as a percentage of the value of the Deposit
Securities) may be imposed for (i) creations effected outside the Clearing
Process; and (ii) cash creations (to offset the Company's brokerage and other
transaction costs associated with using cash to purchase the requisite Deposit
Securities). Investors are responsible for the costs of transferring the
securities constituting the Deposit Securities to the account of the Company.


        The Standard Creation/Redemption Transaction Fee for the Fund will be
$500. The Maximum Creation/Redemption Transaction Fee for the Fund will be
$3,000.



                                      B-39



        Redemption of Fund Shares in Creation Units Aggregations. Fund Shares
may be redeemed only in Creation Unit Aggregations at their NAV next determined
after receipt of a redemption request in proper form by a Fund through the
Transfer Agent and only on a Business Day. A Fund will not redeem Shares in
amounts less than Creation Unit Aggregations. Beneficial owners must accumulate
enough Shares in the secondary market to constitute a Creation Unit Aggregation
in order to have such Shares redeemed by the Company. There can be no assurance,
however, that there will be sufficient liquidity in the public trading market at
any time to permit assembly of a Creation Unit Aggregation. Investors should
expect to incur brokerage and other costs in connection with assembling a
sufficient number of Fund Shares to constitute a redeemable Creation Unit
Aggregation.


        With respect to a Fund, the Custodian, through the NSCC, makes available
prior to the opening of business on the NYSE (currently 9:30 a.m., Eastern Time)
on each Business Day, the identity of the Fund Securities that will be
applicable (subject to possible amendment or correction) to redemption requests
received in proper form (as described below) on that day. Fund Securities
received on redemption may not be identical to Deposit Securities that are
applicable to creations of Creation Unit Aggregations.


        Unless cash redemptions are available or specified for a Fund, the
redemption proceeds for a Creation Unit Aggregation generally consist of Fund
Securities, as announced on the Business Day of the request for redemption
received in proper form, plus or minus cash in an amount equal to the difference
between the NAV of the Fund Shares being redeemed, as next determined after a
receipt of a request in proper form, and the value of the Fund Securities (the
"Cash Redemption Amount"), less a redemption transaction fee as listed below. In
the event that the Fund Securities have a value greater than the NAV of the Fund
Shares, a compensating cash payment equal to the difference is required to be
made by or through an Authorized Participant by the redeeming shareholder.

        The right of redemption may be suspended or the date of payment
postponed (i) for any period during which the NYSE is closed (other than
customary weekend and holiday closings); (ii) for any period during which
trading on the NYSE is suspended or restricted; (iii) for any period during
which an emergency exists as a result of which disposal of the shares of the
Fund or determination of a Fund's NAV is not reasonably practicable; or (iv) in
such other circumstances as is permitted by the SEC.


        Redemption Transaction Fee. A redemption transaction fee is imposed to
offset transfer and other transaction costs that may be incurred by a Fund. An
additional variable charge for cash redemptions (when cash redemptions are
available or specified) for a Fund may be imposed. Investors will also bear the
costs of transferring the Fund Securities from the Company to their account or
on their order. Investors who use the services of a broker or other such
intermediary in addition to an Authorized Participant to effect a redemption of
a Creation Unit Aggregation may be charged an additional fee for such services.
The redemption transaction fees for a Fund are the same as the creation fees set
forth above.


        Placement of Redemption Orders Using Clearing Process. Orders to redeem
Creation Unit Aggregations through the Clearing Process must be delivered
through a Participating Party that has executed the Participant Agreement. An
order to redeem Creation Unit Aggregations


                                      B-40




using the Clearing Process is deemed received by the Company on the Transmittal
Date if (i) such order is received by the Transfer Agent not later than 4:00
p.m., Eastern Time, on such Transmittal Date, and (ii) all other procedures set
forth in the Participant Agreement are properly followed; such order will be
effected based on the NAV of the relevant Fund as next determined. An order to
redeem Creation Unit Aggregations using the Clearing Process made in proper form
but received by the Company after 4:00 p.m., Eastern Time, will be deemed
received on the next Business Day immediately following the Transmittal Date and
will be effected at the NAV next determined on such next Business Day. The
requisite Fund Securities and the Cash Redemption Amount will be transferred by
the third NSCC Business Day following the date on which such request for
redemption is deemed received.

        Placement of Redemption Orders Outside Clearing Process. Orders to
redeem Creation Unit Aggregations outside the Clearing Process must be delivered
through a DTC Participant that has executed the Participant Agreement. A DTC
Participant who wishes to place an order for redemption of Creation Unit
Aggregations to be effected outside the Clearing Process does not need to be a
Participating Party, but such orders must state that the DTC Participant is not
using the Clearing Process and that redemption of Creation Unit Aggregations
will instead be effected through transfer of Fund Shares directly through DTC.
An order to redeem Creation Unit Aggregations outside the Clearing Process is
deemed received by the Company on the Transmittal Date if (i) such order is
received by the Transfer Agent not later than 4:00 p.m., Eastern Time on such
Transmittal Date; (ii) such order is accompanied or followed by the requisite
number of Shares of the Fund, which delivery must be made through DTC to the
Custodian no later than 11:00 a.m., Eastern Time (for the Fund Shares) on the
next Business Day immediately following such Transmittal Date (the "DTC
Cut-Off-Time") and 2:00 p.m., Eastern Time for any Cash Component, if any, owed
to the Fund; and (iii) all other procedures set forth in the Participant
Agreement are properly followed. After the Company has deemed an order for
redemption outside the Clearing Process received, the Company will initiate
procedures to transfer the requisite Fund Securities which are expected to be
delivered within three Business Days and the Cash Redemption Amount, if any,
owed to the redeeming Beneficial Owner to the Authorized Participant on behalf
of the redeeming Beneficial Owner by the third Business Day following the
Transmittal Date on which such redemption order is deemed received by the
Company.


        The calculation of the value of the Fund Securities and the Cash
Redemption Amount to be delivered/received upon redemption will be made by the
Custodian according to the procedures set forth under Determination of NAV
computed on the Business Day on which a redemption order is deemed received by
the Company. Therefore, if a redemption order in proper form is submitted to the
Transfer Agent by a DTC Participant not later than Closing Time on the
Transmittal Date, and the requisite number of Shares of the Fund are delivered
to the Custodian prior to the DTC Cut-Off-Time, then the value of the Fund
Securities and the Cash Redemption Amount to be delivered/received will be
determined by the Custodian on such Transmittal Date. If, however, either (i)
the requisite number of Shares of the relevant Fund are not delivered by the DTC
Cut-Off-Time, as described above, or (ii) the redemption order is not submitted
in proper form, then the redemption order will not be deemed received as of the
Transmittal Date. In such case, the value of the Fund Securities and the Cash
Redemption Amount to be delivered/received will be computed on the Business Day
following the Transmittal Date provided that the Fund Shares of the relevant
Fund are delivered through DTC


                                      B-41



to the Custodian by 11:00 a.m. the following Business Day pursuant to a properly
submitted redemption order.

        If it is not possible to effect deliveries of the Fund Securities, the
Company may in its discretion exercise its option to redeem such Fund Shares in
cash, and the redeeming Beneficial Owner will be required to receive its
redemption proceeds in cash. In addition, an investor may request a redemption
in cash that the Fund may, in its sole discretion, permit. In either case, the
investor will receive a cash payment equal to the NAV of its Fund Shares based
on the NAV of Shares of the relevant Fund next determined after the redemption
request is received in proper form (minus a redemption transaction fee and
additional charge for requested cash redemptions specified above, to offset the
Fund's brokerage and other transaction costs associated with the disposition of
Fund Securities). A Fund may also, in its sole discretion, upon request of a
shareholder, provide such redeemer a portfolio of securities that differs from
the exact composition of the Fund Securities, or cash in lieu of some securities
added to the Cash Component, but in no event will the total value of the
securities delivered and the cash transmitted differ from the NAV. Redemptions
of Fund Shares for Fund Securities will be subject to compliance with applicable
federal and state securities laws and the Fund (whether or not it otherwise
permits cash redemptions) reserves the right to redeem Creation Unit
Aggregations for cash to the extent that the Company could not lawfully deliver
specific Fund Securities upon redemptions or could not do so without first
registering the Fund Securities under such laws. An Authorized Participant or an
investor for which it is acting subject to a legal restriction with respect to a
particular stock included in the Fund Securities applicable to the redemption of
a Creation Unit Aggregation may be paid an equivalent amount of cash. The
Authorized Participant may request the redeeming Beneficial Owner of the Fund
Shares to complete an order form or to enter into agreements with respect to
such matters as compensating cash payment, beneficial ownership of shares or
delivery instructions.

                    XII. CAPITAL STOCK AND OTHER SECURITIES

        There are no restrictions on the right of shareholders to retain or
dispose of the Funds' shares, other than the possible future termination of a
Fund or share class. Each Fund or class may be terminated by reorganization into
another mutual fund or class or by liquidation and distribution of the assets of
the Fund or class. Unless terminated by reorganization or liquidation, each Fund
and share class will continue indefinitely.

        The Company is organized as a corporation under Maryland law. A
shareholder of a Fund will not be personally liable for payment of the Fund's
debts except by reason of his or her own conduct or acts.


        The authorized capital stock of the Company consists of 12.5 billion
shares of stock, $.0001 par value per share. The Company's Board of Directors is
authorized to divide the shares into separate series of stock, one for each of
the Funds that may be created. The series (Funds) set forth herein have been
established by the Board of Directors under the Charter of the Company. Each
series represents a separate pool of assets of the Company's shares and has
different objectives and investment policies. Except as noted below, each share
when issued will have equal dividend, distribution and liquidation rights within
the series for which it was issued, and each fractional share has rights in
proportion to the percentage



                                      B-42



it represents of a whole share. Generally, all shares will vote in the aggregate
as a single class, except if voting by class is required by law or the matter
involved affects only one class, in which case shares will be voted separately
by class. Shares of all series have identical voting rights, except where, by
law, certain matters must be approved by a majority of the shares of the
affected series. There are no conversion or preemptive rights in connection with
any shares of the Funds. The Funds have no sinking fund provisions. All shares
when issued in accordance with the terms of the offering will be fully paid and
non-assessable. Each Fund's redemption provisions are described in its current
Prospectus and elsewhere in this Statement of Additional Information.

        The shares of the Funds have non-cumulative voting rights, which means
that the holders of more than 50% of the shares outstanding voting for the
election of Directors can elect 100% of the Directors if the holders choose to
do so, and, in that event, the holders of the remaining shares will not be able
to elect any person or persons to the Board of Directors. The Company's Charter
and Bylaws provide the holders of one-third of the outstanding shares of the
Funds present at a meeting in person or by proxy will constitute a quorum for
the transaction of business at all meetings.

        As a general matter, the Company will not hold annual or other meetings
of the Funds' shareholders. This is because the Bylaws of the Company provide
for annual meetings only as required by the 1940 Act. Annual and other meetings
may be required with respect to such additional matters relating to the Funds as
may be required by the 1940 Act, any registration of the Funds with the SEC or
any state, or as the Directors may consider necessary or desirable. Each
Director serves until the next meeting of shareholders called for the purpose of
considering the re-election of such Director or the election of a successor to
such Director.


                       XIII. DIVIDENDS AND DISTRIBUTIONS

        The following information supplements and should be read in conjunction
with the section in the Prospectus entitled "DISTRIBUTIONS."

        General Policies. Dividends from net investment income, if any, are
declared and paid annually by each Fund. Distributions of net realized
securities gains, if any, generally are declared and paid once a year, but the
Company may make distributions on a more frequent basis for certain Funds to
improve index tracking or to comply with the distribution requirements of the
Internal Revenue Code, in all events in a manner consistent with the provisions
of the 1940 Act.

        Dividends and other distributions on Shares are distributed, as
described below, on a pro rata basis to Beneficial Owners of such Shares.
Dividend payments are made through DTC Participants and Indirect Participants to
Beneficial Owners then of record with proceeds received from the Company.

        The Company makes additional distributions to the extent necessary (i)
to distribute the entire annual taxable income of the Company, plus any net
capital gains and (ii) to avoid imposition of the excise tax imposed by Section
4982 of the Internal Revenue Code. Management of the Company reserves the right
to declare special dividends if, in its reasonable discretion, such action is
necessary or advisable to preserve the status of each Fund as a


                                      B-43



regulated investment company ("RIC") or to avoid imposition of income or excise
taxes on undistributed income.


        Dividend Reinvestment Service. Brokers may make available to their
customers who own Fund shares the DTC book-entry dividend reinvestment service.
If this service is available and used, dividend distributions of both income and
capital gains will automatically be reinvested in additional whole and
fractional Fund shares of the same Fund. Without this service, investors would
receive their distributions in cash. In order to achieve the maximum total
return on their investments, investors are encouraged to use the dividend
reinvestment service. To determine whether the dividend reinvestment service is
available and whether there is a commission or other charge for using this
service, consult your broker. Brokers may require Fund shareholders to adhere to
specific procedures and timetables. If this service is available and used,
dividend distributions of both income and realized gains will be automatically
reinvested in additional whole shares of the same Fund purchased in the
secondary market.


                                 XIV. TAXATION

        The following supplements the tax information contained in the
Prospectus.

        For federal income tax purposes, each Fund is treated as a separate
corporate entity and has elected and intends to continue to qualify as a
regulated investment company under Subchapter M of the Code. Such qualification
generally relieves a Fund of liability for federal income taxes to the extent
its earnings are distributed in accordance with applicable requirements. If, for
any reason, a Fund does not qualify for a taxable year for the special federal
tax treatment afforded regulated investment companies, the Fund would be subject
to federal tax on all of its taxable income at regular corporate rates, without
any deduction for dividends to shareholders. In such event, dividend
distributions would be taxable as ordinary income to shareholders to the extent
of such Fund's current and accumulated earnings and profits and would be
eligible for the dividends received deduction available in some circumstances to
corporate shareholders. Moreover, if a Fund were to fail to make sufficient
distributions in a year, the Fund would be subject to corporate income taxes
and/or excise taxes in respect of the shortfall or, if the shortfall is large
enough, the Fund could be disqualified as a regulated investment company.

        A 4% non-deductible excise tax is imposed on regulated investment
companies that fail to currently distribute an amount equal to specified
percentages of their ordinary taxable income and capital gain net income (excess
of capital gains over capital losses), if any. The Funds intend to make
sufficient distributions or deemed distributions of their ordinary taxable
income and any capital gain net income prior to the end of each calendar year to
avoid liability for this excise tax.

        Dividends declared in October, November or December of any year payable
to shareholders of record on a specified date in such months will be deemed to
have been received by shareholders and paid by a Fund on December 31 of such
year if such dividends are actually paid during January of the following year.


                                      B-44



        The tax principles applicable to transactions in financial instruments
and futures contacts and options that may be engaged in by a Fund and
investments in passive foreign investment companies ("PFICs") are complex and,
in some cases, uncertain. Such transactions and investments may cause a Fund to
recognize taxable income prior to the receipt of cash, thereby requiring the
Fund to liquidate other positions or to borrow money so as to make sufficient
distributions to shareholders to avoid corporate-level tax. Moreover, some or
all of the taxable income recognized may be ordinary income or short-term
capital gain, so that the distributions may be taxable to Shareholders as
ordinary income. In addition, in the case of any shares of a PFIC in which a
Fund invests, the Fund may be liable for corporate-level tax on any ultimate
gain or distributions on the shares if the Fund fails to make an election to
recognize income annually during the period of its ownership of the PFIC shares.


Special rules govern the federal income tax treatment of certain transactions
denominated in a currency other than the U.S. dollar or determined by reference
to the value of one or more currencies other than the U.S. dollar. The types of
transactions covered by the special rules include the following: (1) the
acquisition of, or becoming the obligor under, a bond or other debt instrument
(including, to the extent provided in Treasury regulations, preferred stock);
(2) the accruing of certain trade receivables and payables; and (3) the entering
into or acquisition of any forward contract, futures contract, option, or
similar financial instrument if such instrument is not marked to market. The
disposition of a currency other than the U.S. dollar by a taxpayer whose
functional currency is the U.S. dollar is also treated as a transaction subject
to the special currency rules. However, foreign currency-related regulated
futures contracts and non-equity options are generally not subject to the
special currency rules if they are or would be treated as sold for their fair
market value at year-end under the marked-to-market rules applicable to other
futures contracts unless an election is made to have such currency rules apply.
With respect to transactions covered by the special rules, foreign currency gain
or loss is calculated separately from any gain or loss on the underlying
transaction and is normally taxable as ordinary income or loss. A taxpayer may
elect to treat as capital gain or loss foreign currency gain or loss arising
from certain identified forward contracts, futures contracts, and options that
are capital assets in the hands of the taxpayer and which are not part of a
straddle. The Treasury Department issued regulations under which certain
transactions subject to the special currency rules that are part of a "Section
988 hedging transaction" will be integrated and treated as a single transaction
or otherwise treated consistently for purposes of the Code. Any gain or loss
attributable to the foreign currency component of a transaction engaged in by a
Fund which is not subject to the special currency rules (such as foreign equity
investments other than certain preferred stocks) will be treated as capital gain
or loss and will not be segregated from the gain or loss on the underlying
transaction.


Each Fund will be required in certain cases to withhold "backup withholding" on
taxable dividends or gross proceeds realized upon sale paid to shareholders who
have failed to provide a correct tax identification number in the manner
required, who are subject to withholding by the Internal Revenue Service for
failure properly to include on their return payments of taxable interest or
dividends, or who have failed to certify to the Fund when required to do so
either that they are not subject to backup withholding or that they are "exempt
recipients." Backup withholding is not an additional tax and any amounts
withheld may be credited against a shareholder's ultimate federal income tax
liability if proper documentation is provided.


                                      B-45



If a Fund holds more than 50% of their assets in foreign stock and securities at
the close of their taxable year, the Fund may elect to "pass through" to the
Funds' shareholders foreign income taxes paid. If a Fund so elects, shareholders
will be required to treat their pro rata portion of the foreign income taxes
paid by the Fund as part of the amounts distributed to them and thus includable
in their gross income for federal income tax purposes. Shareholders who itemize
deductions would then be allowed to claim a deduction or credit (but not both)
on their federal income tax returns for such amounts, subject to certain
limitations. Shareholders who do not itemize deductions would (subject to such
limitations) be able to claim a credit but not a deduction. No deduction will be
permitted to individuals in computing their alternative minimum tax liability.
If a Fund does not qualify or elect to pass through to the Funds' shareholders
foreign income taxes paid, shareholders will not be able to claim any deduction
or credit for any part of the foreign income taxes paid by the Fund.

        The foregoing discussion is based on federal tax laws and regulations
which are in effect on the date of this Statement of Additional Information;
such laws and regulations may be changed by legislative or administrative
action. Shareholders are advised to consult their tax advisers concerning their
specific situations and the application of state, local and foreign taxes.

                               XV. LICENSE GRANT


        The Funds are not sponsored, endorsed, sold or promoted by Zacks, the
licensor. Zacks makes no representation or warranty, express or implied, to the
owners of the Funds or any member of the public regarding the advisability of
investing in securities generally or in the Funds particularly or the ability of
the Underlying Indexes to track general market performance. Zack's only
relationship to Amerivest, the licensee, and the Advisor, the sub-licensee from
Amerivest, is the licensing of the Underlying Indexes which are determined,
composed and calculated by Zacks without regard to Amerivest or the Funds. Zacks
has no obligation to take the needs of Amerivest, the Advisor or the owners of
the Funds into consideration in determining, composing or calculating the
Underlying Indexes. Zacks is not responsible for and has not participated in the
determination of the timing of, prices at, or quantities of the Funds to be
issued or in the determination or calculation of the equation by which the Funds
are to be converted into cash. Zacks has no obligation or liability in
connection with the administration, marketing or trading of the Funds.

        ZACKS DOES NOT GUARANTEE THE QUALITY, ACCURACY AND/OR THE COMPLETENESS
OF THE UNDERLYING INDEXES OR ANY DATA INCLUDED THEREIN. ZACKS MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY AMERIVEST, THE ADVISOR,
OWNERS OF THE FUNDS, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE
UNDERLYING INDEXES OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS
LICENSED PURSUANT TO THE APPLICABLE LICENSE AGREEMENT OR FOR ANY OTHER USE.
ZACKS MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND HEREBY EXPRESSLY DISCLAIMS ALL
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH
RESPECT TO THE UNDERLYING INDEXES OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING
ANY OF THE FOREGOING, IN NO EVENT SHALL ZACKS HAVE ANY LIABILITY FOR ANY
SPECIAL, PUNITIVE,



                                      B-46



INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.

                           XVI. FINANCIAL STATEMENTS


        Each Fund's statements of assets and liabilities and the report thereon
of Eisner LLP, an independent registered public accounting firm, also appearing
therein, is included as part of this Statement of Additional Information. For a
more complete discussion of each Fund's performance, following commencement of
operations, please see the Funds' annual and semi-annual reports to
shareholders, which may be obtained without charge.



                                      B-47







TDAX Funds, Inc.
Statements of Assets and Liabilities
August 6, 2007
-----------------------------------------------------------------------------------------------------------------------------
                                       TDAX               TDAX                TDAX              TDAX               TDAX
                                   Independence       Independence        Independence                         Independence
                                       2010               2020                2030          Independence         In-Target
                                     Exchange-          Exchange-           Exchange-      2040 Exchange-        Exchange-
                                   Traded Fund        Traded Fund         Traded Fund       Traded Fund        Traded Fund
                                  -----------------  -----------------  -----------------  ----------------- ----------------

ASSETS:
        Cash...................... $        20,000   $         20,000   $         20,000   $         20,000  $        20,000

                                  -----------------  -----------------  -----------------  ----------------- ----------------
        Total assets..............          20,000             20,000             20,000             20,000           20,000
                                  -----------------  -----------------  -----------------  ----------------- ----------------

Net Assets........................ $        20,000   $         20,000   $         20,000   $         20,000  $        20,000
                                  =================  =================  =================  ================= ================

NET ASSETS CONSIST OF:
         Paid-in capital           $        20,000   $         20,000   $         20,000   $         20,000  $        20,000

                                  -----------------  -----------------  -----------------  ----------------- ----------------
Net Assets........................ $        20,000   $         20,000   $         20,000   $         20,000  $        20,000
                                  =================  =================  =================  ================= ================

SHARES ISSUED AND OUTSTANDING:
        Shares authorized
        @ $0.0001 par value          2,500,000,000      2,500,000,000      2,500,000,000      2,500,000,000    2,500,000,000
                                  =================  =================  =================  ================= ================
        Shares issued                          800                800                800                800              800
                                  =================  =================  =================  ================= ================

        Net Asset Value per share  $         25.00   $          25.00   $          25.00   $          25.00  $         25.00
                                  =================  =================  =================  ================= ================


See notes to statements of assets and liabilities.




                                      B-48




TDAX Funds, Inc.
Notes to the Statements of Assets and Liabilities
August 6, 2007

NOTE 1: Organization

TDAX Funds, Inc. (the "Company") was organized as a Maryland Company on December
22, 2006 and has had no operations as of August 6, 2007 other than matters
relating to its organization and registration as an investment company under the
Investment Company Act of 1940 and the sale and issuance of shares of beneficial
interest in each of the Company's five series funds to XShares Advisors LLC (the
"Advisor"), a wholly owned subsidiary of XShares Group LLC.

 The Company currently consists of the following five (5) initial series of
underlying fund portfolios (each a "Fund" and collectively the "Funds"):

        TDAX Independence 2010 Exchange-Traded Fund
        TDAX Independence 2020 Exchange-Traded Fund
        TDAX Independence 2030 Exchange-Traded Fund
        TDAX Independence 2040 Exchange-Traded Fund
        TDAX Independence In-Target Exchange-Traded Fund

The investment objective of each Fund is to track the performance, before fees
and expenses, of a particular underlying index, all of which were created by
Zacks Investment Research ("Zacks"). Each Underlying Index is comprised of a mix
of securities from three broad asset classes, international equities, domestic
equities, and fixed income (including, cash, cash equivalents or short-term
money market instruments). These Underlying Indexes are designed to reflect a
portfolio of investments that can be used for lifecycle investing. Lifecycle
investing is an investment technique that starts by targeting a particular
investment horizon. That investment horizon corresponds to the date the investor
expects to need his or her invested assets.

Each Fund offers shares, known as TDAX Independence Target Date Shares that are
intended to be listed and traded on the New York Stock Exchange ("NYSE"). Unlike
conventional mutual funds, each Fund issues and redeems shares on a continuous
basis, at net asset value, only in a large specified number of shares (200,000
shares for each Fund), each called a "Creation Unit."

Except when aggregated in Creation Units, shares are not individually redeemable
securities of the Funds. Transaction fees at scheduled amounts ranging from $500
to $3,000 per creation unit are charged to those persons creating or redeeming
Creation Units.

NOTE 2: Significant Accounting Policies

Use of Estimates - The preparation of these statements of assets and liabilities
in conformity with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of these statements of
assets and liabilities. Actual results could differ from those estimates.


                                      B-49




Federal Income Taxes - Each Fund intends to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code. If so qualified, each
Fund will not be subject to federal income tax to the extent it distributes
substantially all of its net investment income and capital gains to
shareholders.

Note 3. Investment Advisory and Other Agreements

The Advisor to the Funds has overall responsibility for the general management
and administration of the Funds, subject to the supervision of the Funds' Board
of Directors. Under the Investment Advisory Agreement, the Advisor is
responsible for arranging sub-advisory, transfer agency, custody, fund
administration, and all other non-distribution related services for the Funds to
operate. The Advisor will also be responsible for employing any sampling
strategy for the Funds. The Investment Advisory Agreement has an initial term of
two years and can be terminated with sixty days written notice when authorized
either by a majority vote of each Fund's outstanding voting shares or by a vote
of a majority of the Company's Board of Directors.

For the services it provides to the Funds, the Advisor receives a unified
management fee based on a percentage of the daily net assets of each Fund. The
management fee is calculated daily and paid monthly in arrears. Out of the
management fee, the Advisor pays, or arranges for the payment of, all fees and
expenses of the Sub-Advisors, Transfer Agent, the Administrator and Accounting
Agent and the Custodian. Each Fund is responsible for the payment of all other
expenses associated with its operation, including but not limited to, brokerage
expenses, taxes, interest, fees and expenses of counsel to the Funds, fees and
expenses of the Disinterested Directors (including legal counsel fees), certain
out-of-pocket expenses of the Advisor or Sub-Advisors, including, but not
limited to cost of obtaining prices for security valuations (including manual
broker quotes), Federal Reserve charges related to securities transactions,
postage and insurance on physical transfer items, telecommunication charges, and
proxy voting execution, advice and reporting etc., fees and expenses of the
Chief Compliance Officer and expenses associated with the Funds' compliance
program, litigation expenses, fees and expenses of the Funds' independent
auditors, registration fees, expenses associated with compliance by the Fund
with regulatory requirements, including those relating to the development and
distribution of its prospectus and shareholder reports, and extraordinary
expenses. Pursuant to the Investment Advisory Agreement, the Advisor is
authorized to engage one or more sub-advisors to perform any of the services
contemplated to be performed by the Advisor under the Investment Advisory
Agreement.

 Amerivest Investment Management, LLC ("Amerivest") and BNY Investment Advisors
("BNY") act as investment sub-advisors to the Funds (each a "Sub-Advisor" and,
together, the "Sub-Advisors"). Amerivest is a wholly owned subsidiary of TD
AMERITRADE Holding Corporation. BNY is a separate identifiable division of The
Bank of New York Mellon. Pursuant to separate Sub-Advisory Agreements between
the Advisor and each Sub-Advisor, the Sub-Advisors will be responsible for the
day-to-day management of the Funds, subject to the supervision of the Advisor
and the Funds' Board of Directors. In this regard, the Sub-Advisors will be
responsible for implementing the replication strategy for each Fund with regard
to its underlying index and for general administration, compliance and
management services as may be agreed between the Advisor and Sub-Advisors from
time to time.


                                      B-50




For its services provided to the Funds under the Investment Advisory Agreement,
each Fund pays the Advisor a fee equal to 0.65% (per annum) of each Fund's
average daily net assets. The fee is accrued daily and paid monthly in arrears.

In accordance with the terms of the Sub-Advisory Agreement with Amerivest, the
Advisor will pay Amerivest, out of its own resources, a fee at the annual rate
of 0.55% of each Fund's average daily net assets for the first $5 billion in
assets and 0.60% of each Fund's average daily net assets in excess of $5
billion.

Out of the Sub-Advisory fee, Amerivest pays all fees and expenses of BNY, the
transfer agent, administrator and accounting agent and custodian. Amerivest
has contractually agreed to reduce its fees and/or pay Fund operating expenses
(excluding, among other things, interest, taxes and extraordinary expenses) in
order to limit each Fund's net annual operating expenses for shares of the Fund
to 0.65% of the Fund's average net assets (the "Expense Cap"). The Expense Cap
will remain in effect until at least September 30, 2008. Amerivest is permitted
to be reimbursed for fee reductions and/or expense payments made in the prior
three fiscal years. This reimbursement may be requested by Amerivest if the
aggregate amount actually paid by the Fund toward operating expenses for such
fiscal year (taking into account the reimbursement) does not exceed the Expense
Cap.

Amerivest pays BNY, out of its own resources, a fee based on a percentage of the
average daily net assets of each Fund as set forth below:

        10 basis points (0.10%) of the first $100 million in combined daily net
assets of all Funds; and

        5 basis points (0.05%) of the combined daily net assets of all Funds in
excess of $100 million.

        There is a minimum annual fee of $35,000 per Fund.

        Expenses related to the initial organization, registration and offering
of the Funds will be borne by Amerivest.

        The Bank of New York Mellon serves as administrator, custodian,
accounting agent and transfer agent for each Fund.

        ALPS Distributors, Inc. serves as the distributor of Creation Units for
each Fund on an agency basis. The Distributor does not maintain a secondary
market in shares of the Funds.

        Each Fund is entitled to use its respective underlying index pursuant to
a licensing agreement between Zacks and Amerivest and a sub-licensing agreement
between Amerivest and the Advisor. There is no charge to the Funds in connection
with these licensing agreements.


                                      B-51




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholder and Board of Directors of
TDAX Funds, Inc.

We have audited the accompanying statements of assets and liabilities of TDAX
Funds, Inc. (the "Company") consisting of: TDAX Independence 2010
Exchange-Traded Fund, TDAX Independence 2020 Exchange-Traded Fund, TDAX
Independence 2030 Exchange-Traded Fund, TDAX Independence 2040 Exchange-Traded
Fund, and TDAX Independence In-Target Exchange-Traded Fund, as of August 6,
2007. These statements of assets and liabilities are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
statements of assets and liabilities based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
statements of assets and liabilities are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the statements of assets and liabilities. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall statements of assets and
liabilities presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the statements of assets and liabilities referred to above
present fairly, in all material respects, the financial position of TDAX
Independence 2010 Exchange-Traded Fund, TDAX Independence 2020 Exchange-Traded
Fund, TDAX Independence 2030 Exchange-Traded Fund, TDAX Independence 2040
Exchange-Traded Fund, and TDAX Independence In-Target Exchange-Traded Fund, as
of August 6, 2007, in conformity with accounting principles generally accepted
in the United States of America.



/s/ Eisner LLP

New York, New York
August 10, 2007


                                      B-52





                                   APPENDIX A
                                   ----------

                   THE BANK OF NEW YORK - BNY ASSET MANAGEMENT
                         BEACON FIDUCIARY ADVISERS, INC.
                          ESTABROOK CAPITAL MANAGEMENT
                           GANNETT WELSH & KOTLER LLC

                      PROXY VOTING POLICIES AND PROCEDURES


I.    INTRODUCTION AND GENERAL PRINCIPLES
      -----------------------------------

A.   BNY Asset Management, a division of The Bank of New York, and certain of
     its affiliates, BNY Investment Advisers, Beacon Fiduciary Advisers, Inc.,
     Estabrook Capital Management, and Gannett Welsh & Kotler LLC, (individually
     each the "Adviser") have been delegated the authority and responsibility to
     vote the proxies of certain of its respective trust and investment advisory
     clients, including both ERISA and non-ERISA clients.

B.   Adviser understands that proxy voting is an integral aspect of investment
     management and that it is a fiduciary with respect to voting the securities
     in client accounts and will vote such securities in accordance with its
     fiduciary responsibilities.

C.   Adviser believes that the following policies and procedures are reasonably
     expected to ensure that proxy voting decisions are made in the best
     interest of clients, in accordance with Adviser's fiduciary duties,
     applicable rules under the Investment Advisers Act of 1940 and fiduciary
     standards and responsibilities for ERISA clients set out in Department of
     Labor interpretations. In making proxy voting decisions, only those factors
     which affect the investment value of a particular asset will be considered.

D.    There may be circumstances under which the Adviser may abstain from voting
     a client proxy for reasons related to difficulties incurred in making an
     informed decision as to how to vote the proxy (e.g., language problems) or
     difficulties incurred in effecting a vote (e.g., timing, location, or
     process problems.) The Adviser's decision in such circumstances may take
     into account the effect that the proxy vote, either by itself or together
     with other votes, is expected to have on the value of the client's
     investment and whether this expected effect would outweigh the
     extraordinary measures, if available, to accomplish voting. When the
     Adviser decides to abstain, the Adviser will document the reasons
     therefore.

E.   The Adviser may not use its discretion to vote securities issued by The
     Bank of New York Company, Inc. ("the Company") or any of its subsidiaries
     that are held in any trust or investment management account over which the
     Adviser exercises discretion unless, under applicable law, the client may
     authorize the Adviser to vote such securities and furnishes the Adviser
     with an appropriate authorization. For trust and investment management
     accounts over which the Adviser is required to vote securities, absent such
     authorization,





     the Adviser will retain an independent fiduciary to vote such securities
     and will comply with all laws and regulations relating to voting such
     shares.

F.   Business units will prepare and implement local policies, as necessary, to
     specify procedures to ensure the business unit's compliance with this
     policy.


II.  OBJECTIVES
     ----------

This policy is written to:

o    explain the principles governing the voting of proxies for fiduciary
     clients;

o    outline the procedures for establishing Proxy Voting Guidelines;

o    set for the authority of Proxy Voting Committees the requirements for
     documentation of decisions; and

o    outline the requirements for dealing with conflicts of interest in proxy
     voting situations.


III. RESPONSIBILITY AND OVERSIGHT
     ----------------------------

A.   Each Adviser has designated a Proxy Committee or employs the Proxy
     Committee of The Bank of New York Asset Management ("BNYAM"). A Proxy
     Committee is responsible for administering and overseeing the proxy voting
     process, including:

     (1) determining how to vote proxies;

     (2) developing, authorizing, implementing and updating the Adviser's
     written policies and procedures, including the Proxy Voting Guidelines
     referenced in Section IV below;

     (3) overseeing the proxy voting process; and

     (4) engaging and overseeing any third-party vendors as voting delegate
     ("Delegate") to review, advise on, monitor and/or vote proxies.

B.    Such Proxy Committee will meet as frequently and in such manner as
      necessary or appropriate in order to fulfill its responsibilities.

C.   The members of the Proxy Committee of BNYAM will be appointed from time to
     time and will include the Chief Investment Officer, the Chief Trust
     Officer, and senior portfolio managers and other investment professionals
     (collectively "Investment Professionals") employed by each Adviser and
     appointed by the Chief investment Officer of each such Adviser. A quorum
     will be achieved when three members are present, including at least





     two of the group: the Chief Investment Officer (or his/her designee), the
     Chief Trust Officer (or his/her designee), and one Senior Portfolio
     Manager. The Sector Compliance Officer (or his/her designee) will attend
     meetings as an observer.

D.   The Chief Investment Officer and certain members of the Proxy Committee of
     BNYAM, who are so designated by the Chief Investment Officer (each an
     "Authorized Member"), are authorized to give voting instructions to the
     Delegate.

E.   In the event that any member of the Proxy Committee has a conflict of
     interest with respect to a particular matter under discussion by the
     Committee, such member shall recuse himself or herself from consideration
     of such matter.


IV.  PROXY VOTING GUIDELINES OF BNYAM
     --------------------------------

A.   The Adviser will determine how to vote each of several issues likely to
     appear in proxies and will reflect these decisions in its Proxy Voting
     Guidelines. In some cases, an Adviser will rely upon the Proxy Voting
     Guidelines and the Proxy Voting Procedures of BNYAM, described in Section V
     of this Policy. A summary of the current applicable Proxy Voting Guidelines
     for BNYAM is attached to these Proxy Voting Policies and Procedures as
     Exhibit A.

B.   In some situations, the Delegate may recommend "case-by-case" voting for an
     issue, which means that the vote will be cast "for" or "against" an issue
     depending upon the Delegate's evaluation of certain factors applicable to
     the issuer at the time the vote is cast. For each issue for which the
     Delegate recommends "case-by-case" voting, the Delegate will set forth the
     methodology by which the Delegate would determine the vote for that issue
     on an individual proxy. The Adviser will review such methodology and will
     determine whether or not to accept the methodology and thus accept the
     resultant voting determinations. The Adviser's acceptance of "case-by-case"
     voting for an issue will be reflected in the Proxy Voting Guidelines.

C.   At least annually, the Adviser will review the then current Proxy Voting
     Guidelines and will determine if the voting instructions therein continue
     to be appropriate and, if not, will make necessary changes. The Adviser
     will also determine how to vote any new issues that the Adviser or the
     Delegate expects to appear on proxies in the coming year. The Adviser's
     decisions will be reflected in the Proxy Voting Guidelines.

D.   In making all of the decisions in paragraph A, B, and C of this Section IV,
     the Adviser will consider any analyses provided by the Delegate or by any
     other sources the Adviser may choose to consult in order to determine the
     voting posture which is most likely to maximize the investment value of the
     particular asset. If the Adviser makes a determination that is in
     opposition to the recommendations of the Delegate or the then current Proxy
     Voting Guidelines, then the Adviser will document the reasons for selecting
     the voting position chosen.





E.   The Adviser has determined that, except as set forth below in this Section
     IV, proxies will be voted in accordance with the voting decisions
     documented in the Proxy Voting Guidelines.

F.   In the event that the Proxy Voting Guidelines do not address how an issue
     should be voted, the Proxy Committee will make a determination as to how to
     vote that issue to maximize the investment value of the particular asset.
     In making such determination, the Adviser will consider any analyses
     provided by the Delegate or by any other sources the Adviser may choose.
     Decisions of the Adviser will be reflected in the Proxy Voting Guidelines.
     If the Adviser makes a determination that is in opposition to the
     recommendations of the Delegate, then the Adviser will document the reasons
     for the voting position chosen.

G.   In the event that the Chief Investment Officer or another Investment
     Professional believes that any proxy should be voted in a manner
     inconsistent with the Proxy Voting Guidelines such Investment Professional
     will inform a member of the Proxy Committee in writing of such
     recommendation and provide specific information, including the reasons the
     Investment Professional believes a proxy vote inconsistent with the Proxy
     Voting Guidelines is appropriate for the client. The Proxy Committee will
     review the information submitted by the Investment Professional and
     consider such other matters as it deems appropriate to determine how to
     vote the proxy. The Proxy Committee will instruct the Delegate accordingly.

H.   In making its determinations in connection with Sections IV.F. and IV.G.
     above, the Proxy Committee will be mindful of the need for timely
     decisions.


V.   PROXY VOTING PROCEDURES OF BNYAM
     --------------------------------

A.   If a client makes a specific request to vote specific securities in the
     client's account, to the extent such client is permitted by applicable law
     to make such request, the Adviser will vote client proxies in accordance
     with such client's request, even if it is inconsistent with Adviser's
     policies and procedures, including the Proxy Voting Guidelines. Such
     specific requests must be made in writing by the individual client or by an
     authorized officer, representative or named fiduciary of a client, will be
     relayed to the Delegate by an Authorized Member of the Proxy Committee, and
     will be maintained by the Adviser.

B.   At the recommendation of the Proxy Committee, Adviser may engage Delegate
     as its voting delegate to:

     (1) research and participate in developing the Proxy Voting Guidelines,
         referenced in Section IV;

     (2) vote and submit proxies in a timely manner in accordance with the
         Adviser's Proxy Voting Guidelines or instructions of a client relayed
         to the Delegate by the Adviser;





     (3) handle other administrative functions related to proxy voting;

     (4) maintain records of proxy statements received in connection with proxy
         votes and provide copies of such proxy statements to the Adviser
         promptly upon request;

     (5) maintain records of votes cast; and

     (6) provide recommendations with respect to proxy voting matters in
         general.

C.   Notwithstanding the foregoing, Adviser retains final authority and
     fiduciary responsibility for proxy voting.


VI.  CONFLICTS OF INTEREST
     ---------------------

A.   The Adviser will comply with the Conflicts of Interest Policy of The Bank
     of New York.

B.   Adviser will obtain a copy of any Delegate policies or procedures regarding
     conflicts of interest or potential conflicts of interest that could arise
     in the Delegate's providing proxy voting services to the Adviser. Adviser
     will examine such policies and procedures to determine if conflicts of
     interest and potential conflicts of interest of the Delegate would be
     appropriately addressed by the Delegate.

C.   The Adviser will request the Delegate to disclose to the Adviser any
     conflicts of interest or potential conflicts of interest it determines it
     may have with respect to voting any proxies, including conflicts or
     potential conflicts arising out of the Delegate's receipt of compensation
     from issuers, and the Adviser will consider such conflicts in determining
     whether and the extent to which the Adviser should rely upon advice from
     the Delegate when determining how to vote those proxies.

D.   Material conflicts cannot be resolved by simply abstaining from voting.


VII. RECORDKEEPING
     -------------

Adviser will maintain records relating to the implementation of these Proxy
Voting Policies and Procedures, including:

     (1) a copy of these policies and procedures which shall be made available
         to clients, upon request;

     (2) proxy statements received regarding client securities (which will be
         satisfied by relying on EDGAR or the Delegate);

     (3) a record of each vote cast (which the Delegate may maintain on
         Adviser's behalf);





     (4) a copy of each submission by any Investment Professional under Section
         IV above;

     (5) other documents created by Adviser that were material to making a
         decision with respect to voting proxies on behalf of a client or that
         memorializes the basis for a proxy voting decision (including, without
         limitation, the matters outlined in Section IV.F. and IV.G.. above);
         and

     (6) each written client request for proxy voting records and Adviser's
         written response to any client request (written or oral) for such
         records.

Such proxy voting books and records shall be maintained in an easily accessible
place for a period of six years, the first two by the Proxy Committee member who
represents the Portfolio Administration Department or the Delegate.


VIII. DISCLOSURE
      ----------

Except as otherwise required by law, Adviser has a general policy of not
disclosing to any issuer or third party how Adviser or its voting Delegate voted
a client's proxy.


September 30, 2004





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                            BoNY: Proxy Voting Policy

I.      M0100s  Management Proposals - Routine/Business


Agenda Code and Description                                             ISS          Client
                                                                       Policy        Policy

      M0101   Ratify Auditors                                           FOR          FOR

      M0102   Change Date/Location of Annual Meeting                    FOR          FOR

      M0105   Accept Financial Statements and Statutory Reports         FOR          For

      M0106   Amend Articles/Charter--General Matters                   FOR          FOR

      M0107   Approve Dividends                                         FOR          For

      M0109   Approve Remuneration of Auditors                          FOR          For

      M0111   Change Company Name                                       FOR          FOR

      M0113   Approve Investment Advisory Agreement                     C by C       FOR

      M0114   Amend Investment Advisory Agreement                       C by C       FOR

      M0116   Authorize Filing of Required Documents/Other Formalities  FOR          For

      M0117   Designate Inspector or Shareholder Representative(s) of   FOR          For
              Minutes of Meeting

      M0119   Reimburse Proxy Contest Expenses                          C by C       C by C

      M0120   Approve Proposed Changes to Bank Charter                  C by C       C by C

      M0121   Approve Continuation of Company Under Canadian            FOR          For
              Business Corporation Act

      M0122   Adopt New Articles of Association/Charter                 C by C       C by C

      M0123   Approve Special Auditors' Report Regarding Related-Party  FOR          For
              Transactions
              Related-Party Transactions Auditor Reports (France)       C by C       C by C
      M0124   Approve Stock Dividend Program                            C by C       C by C

      M0125   Other Business                                            AGAINST        FOR






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I.      M0100s  Management Proposals - Routine/Business (Cont.)



Agenda Code and Description                                             ISS          Client
                                                                       Policy        Policy

      M0126   Amend Charter or Bylaws--Non-Routine                      C by C       C by C

      M0128   Designate Newspaper to Publish Meeting Announcements      FOR          FOR

      M0129   Approve Minutes of Meeting                                FOR          FOR

      M0131   Approve Change of Fundamental Investment Policy           C by C       FOR

      M0135   Amend Corporate Purpose                                   FOR          FOR

      M0136   Approve Auditors and Authorize Board to Fix Remuneration  FOR          FOR
               of Auditors

      M0137   Miscellaneous Proposal--Company-Specific                  C by C       C by C

      M0138   Authorize Board to Ratify and Execute Approved            FOR          FOR
              Resolutions

      M0140   Approve Multiple Classes of Stock/Same Voting Rights      C by C      C by C

      M0150   Receive Financial Statements and Statutory Reports        FOR          FOR

      M0151   Approve Financial Statements, Allocation of Income, and   FOR          FOR
              Discharge Directors

      M0152   Approve Allocation of Income and Dividends                C by C       C by C

      M0153   Approve Allocation of Dividends on Shares Held by         FOR          For
              Company

      M0154   Approve Continuation of Company Under Provincial          C by C       C by C
              Business Corporation Act

      M0155   Appoint Auditors and Deputy Auditors                      FOR          FOR

      M0156   Ratify Alternate Auditor                                  FOR          FOR

      M0157   Appoint Censor(s)                                         FOR          FOR

      M0158   Approve Remuneration of Directors and Auditors            FOR          FOR






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I.      M0100s  Management Proposals - Routine/Business (Cont.)



Agenda Code and Description                                             ISS          Client
                                                                       Policy        Policy

      M0159   Change Location of Registered Office/Headquarters         FOR          For

      M0160   Approve Listing of Shares on a Secondary Exchange         FOR          For

      M0161   Appoint Agencies to Rate the Company's Publicly Offered   FOR          For
              Securities

      M0162   Designate Risk Assessment Companies                       FOR          For

      M0163   Approve Investment and Financing Policy                   FOR          For

      M0164   Open Meeting                                              None

      M0165   Close Meeting                                             None

      M0166   Allow Questions                                           None

      M0167   Announce Vacancies on Supervisory Board                   None

      M0168   Elect Chairman of Meeting                                 FOR          For

      M0169   Prepare and Approve List of Shareholders                  FOR          For


      M0170   Acknowledge Proper Convening of Meeting                   FOR          For

      M0171   Elect Members of Election Committee                       FOR          For

      M0172   Consider Measures to Address the Decline in the           FOR          For
              Company's Net Asset Value Relative to Its Capital

      M0173   Approve Standard Accounting Transfers                     FOR          For

      M0174   Receive Shareholders' Committee Report                    FOR          For

      M0175   Transact Other Business                                   None

      M0176   Change Fiscal Year End                                    C by C       C by C






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II.   M0200s  Management Proposals - Director Related



Agenda Code and Description                                             ISS          Client
                                                                       Policy        Policy

      M0201   Elect Directors                                           C by C       FOR

      M0202   Fix Number of Directors                                   FOR          FOR

      M0203   Approve Increase in Size of Board                         C by C       FOR

      M0204   Approve Decrease in Size of Board                         C by C       FOR

      M0205   Allow Board to Set its Own Size                           AGAINST     AGAINST

      M0206   Classify the Board of Directors                           AGAINST     AGAINST

      M0207   Eliminate Cumulative Voting                               AGAINST      FOR

      M0208   Fix Number of and Elect Directors                         C by C       C by C

      M0209   Approve Director/Officer Liability Provisions             C by C       C by C

      M0210   Approve Director/Officer Indemnification Provisions       C by C       C by C

      M0211   Approve Director/Officer Indemnification Agreements       C by C       C by C

      M0212   Approve Director/Officer Liability and Indemnification    C by C       C by C

      M0215   Declassify the Board of Directors                         FOR          FOR

      M0216   Remove Age Restriction for Directors                      FOR          FOR

      M0217   Establish/Alter Mandatory Retirement Policy for Directors C by C       C by C

      M0218   Elect Director to Represent Class X Shareholders          C by C       CbyC

      M0219   Approve Remuneration of Directors                         C by C       CbyC

      M0222   Allow Board to Delegate Powers to Committees              C by C       C by C

      M0223   Adopt/Amend Nomination Procedures for the Board           C by C      AGAINST

      M0225   Elect Directors (Opposition Slate)                        C by C       C by C

      M0226   Classify Board and Elect Directors                        AGAINST     AGAINST

      M0227   Amend Articles--Board-Related                             C by C       C by C






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II. M0200s Management Proposals - Director Related (Cont.)



Agenda Code and Description                                             ISS          Client
                                                                       Policy        Policy

      M0228   Elect Alternate/Deputy Directors                          C by C       C by C

      M0229   Authorize Board to Fill Vacancies                         AGAINST     AGAINST

      M0231   Adopt or Amend Director Qualifications                    C by C       FOR

      M0232   Change Range for the Size of the Board                    C by C       For

      M0233   Elect Company Clerk/Secretary                             FOR          FOR

      M0250   Elect Supervisory Board Member                            FOR          For

      M0251   Elect Employee Representative to the Board                FOR          FOR

      M0252   Create Position of Honorary Director                      FOR          FOR

      M0253   Amend Articles to Change Size of Supervisory Board        FOR          For

      M0254   Allow Board to Appoint Additional Directors Between       C by C       C by C
              Annual Meetings

      M0255   Amend Quorum Requirements                                 C by C       FOR

      M0256   Appoint Members of Shareholders' Committee                FOR          FOR

      M0257   Elect Board Representative for Holders of Savings         FOR          FOR
              Shares and Fix His/Her Remuneration

      M0258   Determine Number of Members and Deputy Members of         FOR          For
              Board

      M0259   Elect Members and Deputy Members of Corporate             FOR          FOR
              Assembly

      M0260   Approve Discharge of Management Board                     FOR          FOR

      M0260   Removal of Authority to Approve Discharge (Denmark)       AGAINST     AGAINST

      M0261   Approve Discharge of Supervisory Board                    FOR          FOR

      M0262   Approve Discharge of Management and Supervisory Board     FOR          FOR

      M0263   Approve Discharge of Auditors                             FOR          FOR

      M0264   Approve Discharge of Board and President                  FOR          FOR

      M0267   Company Specific--Board-Related                           C by C       C by C






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III.  M0300s  Management Proposals - Capitalization



Agenda Code and Description                                             ISS          Client
                                                                       Policy        Policy

      M0301   Authorize a New Class of Common Stock                     C by C       C by C

      M0302   Authorize New Class of Preferred Stock                    C by C       C by C

      M0304   Increase Authorized Common Stock                          C by C       FOR

      M0305   Increase Authorized Preferred Stock                       C by C       C by C

      M0306   Increase Authorized Preferred and Common Stock            C by C       C by C

      M0307   Approve Stock Split                                       FOR          FOR

      M0308   Approve Reverse Stock Split                               C by C       C by C

      M0309   Approve Increase in Common Stock and a Stock Split        C by C       FOR

      M0312   Issue Common Stock Upon Conversion of Preferred Stock     C by C       FOR

      M0313   Approve Issuance of Warrants/Convertible Debentures       C by C       C by C

      M0314   Eliminate Preemptive Rights                               FOR          C by C

      M0315   Eliminate/Adjust Par Value of Common Stock                FOR          FOR

      M0316   Amend Votes Per Share of Existing Stock                   C by C      AGAINST

      M0318   Authorize Share Repurchase Program                        FOR          FOR

      M0318   Share Repurchase (SPAIN/PORTUGAL)                         C by C       C by C

      M0318   Repuchase of Shares in Lieu of Dividends (Denmark)        C by C       C by C

      M0319   Authorize Board to Set Terms of Preferred                 AGAINST     AGAINST

      M0320   Eliminate Class of Preferred Stock                        FOR          FOR

      M0321   Eliminate Class of Common Stock                           FOR          FOR

      M0322   Cancel Company Treasury Shares                            FOR          FOR

      M0323   Approve Issuance of Shares for a Private Placement        C by C       C by C







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III. M0300s Management Proposals - Capitalization (Cont.)



Agenda Code and Description                                             ISS          Client
                                                                       Policy        Policy

      M0325   Reduce Authorized Common Stock                            FOR          FOR

      M0326   Authorize Capitalization of Reserves for Bonus Issue or   FOR          For
              Increase in Par Value

      M0327   Approve Reduction in Stated Capital                       FOR          For

      M0328   Approve Increase in Authorized Capital                    C by C       C by C

      M0329   Authorize Issuance of Equity or Equity-Linked Securities  C by C       C by C

              with Preemptive Rights


      M0330   Company Specific--Equity-Related                          C by C       C by C
      M0330   Authorize use of Financial Derivatives                    C by C       C by C
              Method when repuchasing shares (GERMANY & ITALY)

      M0331   Approve Issuance of Equity or Equity-Linked Securities    C by C       C by C
              without Preemptive Rights

      M0332   Increase Authorized Common Stock and Authorize New        C by C       C by C
              Class of Preferred Stock

      M0334   Increase Authorized Common Stock and Authorize New        C by C       C by C
              Class of Common Stock

      M0335   Adopt/Amend Dividend Reinvestment Plan                    C by C       FOR

      M0336   Increase Capital Stock for Use in Shareholder Rights Plan AGAINST     AGAINST

      M0338   Reduce Authorized Preferred Stock                         FOR          FOR

      M0339   Reduce Authorized Common and Preferred Stock              FOR          FOR

      M0340   Extend Redemption Date of Common/Preferred Stock          C by C       C by C

      M0341   Approve Dual Class Stock Recapitalization                 AGAINST     AGAINST

      M0342   Approve/Amend Stock Ownership Limitations                 C by C       C by C

      M0343   Approve/Amend Securities Transfer Restrictions            AGAINST     Against

      M0344   Consent to Amended Bond Indenture                         C by C       For






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III. M0300s Management Proposals - Capitalization (Cont.)



Agenda Code and Description                                             ISS          Client
                                                                       Policy        Policy

      M0350   Authorize Stock With Other Than One Vote Per Share        AGAINST     Against

      M0351   Approve Unlimited Capital Authorization                   AGAINST     Against

      M0352   Convert Multiple Voting Shares to Common Shares           FOR          For

      M0353   Ratify Past Issuance of Shares                            C by C       C by C

      M0354   Approve Creation of Conditional Capital                   C by C       CbyC

      M0355   Approve Conversion of Participation Certificates          FOR          For

      M0356   Authorize Issuance of Investment Certificates             C by C       CbyC

      M0357   Authorize Issuance of Warrants with Preemptive Rights     C by C       CbyC

      M0358   Authorize Issuance of Warrants without Preemptive Rights  C by C       CbyC

      M0359   Authorize Issuance of Shares with Warrants Attached with  C by C       CbyC
              Preemptive Rights

      M0360   Authorize Issuance of Shares with Warrants Attached       C by C       C by C
              without Preemptive Rights

      M0361   Authorize Issuance of Bonds with Warrants Attached with   C by C       C by C
              Preemptive Rights

      M0362   Authorize Issuance of Bonds with Warrants Attached        C by C       C by C
              without Preemptive Rights

      M0363   Authorize Issuance of Convertible Bonds with Preemptive   C by C       C by C
              Rights

      M0364   Authorize Issuance of Convertible Bonds without           C by C       C by C
              Preemptive Rights

      M0365   Authorize Issuance of Equity Upon Conversion of a         C by C       C by C
              Subsidiary's Equity-Linked Securities

      M0366 Authorize Capital Increase for Future Share Exchange Offers C by C       C by C

      M0367   Set Global Limit for Capital Increase to Result From All  C by C       C by C
              Issuance Requests






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      III. M0300s Management Proposals - Capitalization (Cont.)



Agenda Code and Description                                             ISS          Client
                                                                       Policy        Policy

      M0368   Approve Issuance of Shares Pursuant to the Share Option   C by C        C by C
              Scheme

      M0369   Approve Issuance of Eurobonds                             C by C       C by C

      M0370   Authorize Issuance of Bonds/Debentures                    C by C       C by C

      M0371   Approve Renewal of Unmarketable Parcels Provision         FOR          For

      M0372   Approve Bond Repurchase                                   FOR          For

      M0373   Authorize Reissuance of Repurchased Shares                FOR          For

      M0374   Approve Reduction in Share Capital                        FOR          For

      M0375   Approve Reduction/Cancellation of Share Premium Account   FOR          For

      M0376   Convert Form of Securities                                C by C       C byC

      M0377   Amend Articles/Charter to Reflect Changes in Capital      FOR          For

      M0378   Amend Articles/Charter--Equity-Related                    C by C       CbyC





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IV.   M0400s  Management Proposals - Reorg. and Mergers



Agenda Code and Description                                             ISS          Client
                                                                       Policy        Policy

      M0401   Change State of Incorporation [  ]                        C by C       C by C

      M0404   Approve Reorganization Plan                               C by C       C by C

      M0405   Approve Merger Agreement                                  C by C       C by C

      M0407   Approve Restructuring Plan                                C by C       C by C

      M0410   Issue Shares in Connection with an Acquisition            C by C       FOR

      M0411   Approve Disposition of Assets and Liquidate Company       C by C       C by C

      M0412   Approve Recapitalization Plan                             C by C       C by C

      M0413   Amend Articles--Organization-Related                      C by C       C by C

      M0414   Company Specific--Organization-Related                    C by C       CbyC

      MO415   Approve Sale of Company Assets                            C by C       C by C

      M0418   Approve Formation of Holding Company                      C by C       FOR

      M0419   Acquire Certain Assets of Another Company                 C by C       FOR


      M0420   Approve Conversion to Self-Managed REIT                   C by C       C by C


      M0430   Approve/Amend Subadvisory Agreement                       C by C       FOR

      M0431   Adopt Dollar-based Voting Rights                          C by C       FOR

      M0432   Approve Conversion to Series of Delaware                  C by C       FOR
              Business Trust.

      M0433   Approve Conversion from Closed-End to                     C by C       FOR
              Open-End Fund

      M0434   Approve Merger of Funds                                   C by C       FOR

      M0435   Approve Distribution Agreement                            C by C       FOR

      M0450   Approve Acquisition                                       C by C       CbyC





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IV. M0400s Management Proposals - Reorg. and Mergers (Cont.)



Agenda Code and Description                                             ISS          Client
                                                                       Policy        Policy

      M0451   Approve Merger by Absorption                              C by C       CbyC

      M0452   Approve Joint Venture Agreement                           C by C       C by C

      M0453   Approve Plan of Liquidation                               C by C       C by C

      M0454   Approve Spin-Off Agreement                                C by C       C by C

      M0455   Approve Public Offering of Shares in Subsidiary           C by C       C by C

      M0456   Approve Exchange of Debt for Equity                       C by C       C by C

      M0457   Waive Requirement for Mandatory Offer to                  C by C       C by C
              All Shareholders.

      M0458  Approve Accounting Treatment of Merger, Absorption, or     C by C       CbyC
             Similar Transaction

      M0459   Approve Affiliation Agreements with Subsidiaries          C by C       CbyC


      M0460   Approve Transaction with a Related Party                  C by C       CbyC
      M0460   Related Party Transaction (Russia):                       C by C       C by C

      M0461   Amend Articles to: (Japan)                                C by C       CbyC

      M0462   Approve Pledging of Assets for Debt                       C by C       CbyC

      M0463   Approve Investment in Another Company                     C by C       CbyC

      M0464   Approve Loan Agreement                                    C by C       CbyC

      M0470   Company Specific - Mutual Fund                            C by C       C by C






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V.    M0500s Management Proposals - Non-Salary Comp.



Agenda Code and Description                                             ISS          Client
                                                                       Policy        Policy

      M0501   Approve Stock Option Plan                                 C by C       C by C

      M0503   Amend Stock Option Plan                                   C by C       C by C

      M0504   Approve Incentive Stock Option Plan                       C by C       CbyC

      M0506   Amend Incentive Stock Option Plan                         C by C       CbyC

      M0507   Approve Restricted Stock Plan                             C by C       C by C

      M0509   Amend Restricted Stock Plan                               C by C       C by C

      M0510   Approve Employee Stock Purchase Plan                      C by C       C by C

      M0512   Amend Employee Stock Purchase Plan                        C by C       C by C

      M0514   Approve Nonqualified Employee Stock Purchase Plan         C by C       C by C

      M0516   Amend Nonqualified Employee Stock Purchase Plan           C by C       C by C

      M0522   Approve Omnibus Stock Plan                                C by C       C by C

      M0524   Amend Omnibus Stock Plan                                  C by C       C by C

      M0525   Approve Non-Employee Director Stock Option Plan           C by C       C by C

      M0526   Amend Non-Employee Director Stock Option Plan             C by C       C by C

      M0527   Approve Non-Employee Director Restricted Stock Plan       C by C       CbyC

      M0528   Approve Stock Appreciation Rights Plan                    C by C       C by C

      M0530   Amend Stock Appreciation Rights Plan                      C by C       C by C

      M0534   Approve/Amend 401(k)/Savings Plan                         C by C       CbyC

      M0535   Approve/Amend Executive Incentive Bonus Plan              C by C       C by C

      M0537   Approve/Amend Supplemental Retirement Plan                C by C       C by C

      M0538   Approve/Amend Deferred Compensation Plan                  C by C       C by C

      For MO501 - MO535, use our simplistic method:




1)If dilution would be greater than 30% - vote AGAINST 2) If strike prices are
10% or more below market - vote AGAINST





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V. M0500s Management Proposals - Non-Salary Comp. (Cont.)



Agenda Code and Description                                             ISS          Client
                                                                       Policy        Policy

      M0540   Approve Employment Agreement                              C by C       CbyC

      M0541   Approve Stock/Cash Award to Executive                     C by C       C by C

      M0543   Approve Executive Loans to Exercise Options               C by C       C by C

      M0546   Approve Executive Loans (Not for Options)                 C by C       CbyC

      M0547   Company-Specific--Compensation-Related                    C by C       C by C

      M0548   Approve Repricing of Options                              C by C       C by C

      M0554   Approve Outside Director Stock Awards/Options             C by C       FOR
      in Lieu of Cash

      M0555   Approve Stock Option Plan Grants                          C by C       CbyC

      M0556   Approve Stock-for-Salary/Bonus Plan                       C by C       FOR

      M0557   Approve Retirement Benefits for Nonexecutive Directors    C by C       CbyC

      M0558   Approve/Amend Bundled Compensation Plans                  C by C       C by C

      M0561   Approve/Amend Executive Stock Option Plan                 C by C       CbyC

      M0562   Approve/Amend Employee Savings-Related Share Purchase     C by C       CbyC

      M0564   Approve/Amend Employment Agreements                       C by C       C by C

      M0567   Approve Employee Stock Ownership Plan                     C by C       C by C

      M0568   Approve/Amend Profit Sharing Plan                         C by C       C by C

      M0580   Appoint Internal Statutory Auditor                        C by C       C by C

      M0582   Approve Retirement Bonuses for Directors                  C by C       C by C

      M0583   Approve Retirement Bonuses for Statutory Auditors         C by C       C by C

      M0584   Approve Retirement Bonuses for Directors and Statutory    C by C       C by C
              Auditors

      M0585   Approve Special Bonus for Family of Deceased Director     C by C       C by C

      M0586   Approve Special Bonus for Family of Deceased Statutory    C by C       CbyC
      Auditor






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V. M0500s Management Proposals - Non-Salary Comp. (Cont.)



Agenda Code and Description                                             ISS          Client
                                                                       Policy        Policy

      M0587   Approve Special Bonuses for Families of Deceased         C by C       C b yC
              Directors and Statutory Auditors

      M0588   Approve Increase in Aggregate Compensation Ceiling for    C by C       CbyC
      Directors

      M0589   Approve Increase in Aggregate Compensation Ceiling for    C by C       C by C
      Statutory Auditors

      M0590   Approve Increase in Aggregate Compensation Ceiling for    C by C       C by C
      Directors and Statutory Auditors

      M0591   Approve or Amend Option Plan for Overseas Employees       C by C       C by C

      M0592   Amend Terms of Outstanding Options                        C by C       C by C

      M0593   Approve Share Plan Grant                                  C by C       C by C

      M0594   Approve Financial Assistance in Connection with Stock     C by C       C by C
              Purchase/Stock Option Plan

      M0595   Amend Articles/Charter--Compensation-Related              C by C       C by C

      M0596   Approve Non-Employee Director Restricted Stock Plan       C by C       C by C

      M0597   Amend Non-Employee Director Restrictred Stock Plan        C by C       C by C

      M0598   Approve Non-Employee Director Omnibus Plan                C by C       C by C

      M0599   Amend Non-Employee Director Omnibus Stock Plan            C by C       C by C






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VI.     M0600s Management Proposals - Antitakeover Related



Agenda Code and Description                                             ISS          Client
                                                                       Policy        Policy

      M0601   Amend Articles/Bylaws/Charter to Include                  AGAINST      AGAINST
              Antitakeover Provision(s)

      M0602   Amend Articles/Bylaws/Charter to Remove                   FOR          FOR
              Antitakeover Provision(s)

      M0603   Eliminate Right to Act by Written Consent                 AGAINST     AGAINST

      M0604   Provide Directors May Only Be Removed for Cause           AGAINST     AGAINST

      M0605   Adopt or Increase Supermajority Vote Requirement          AGAINST     AGAINST
              for Amendments (up to 66 2/3%)

      M0606   Adopt or Increase Supermajority Vote Requirement          AGAINST     AGAINST
              for Mergers

      M0607   Adopt or Increase Supermajority Vote Requirement          AGAINST     AGAINST
              for Removal of Directors

      M0608   Reduce Supermajority Vote Requirement                     FOR          FOR

      M0609   Adopt or Amend Shareholder Rights Plan (Poison Pill)      C by C      AGAINST

      M0611   Approve Control Share Acquisition                         C by C      AGAINST

      M0612   Opt Out of State's Control Share Acquisition Law          C by C       FOR

      M0613   Adopt Fair Price Provision                                C by C      AGAINST

      M0614   Rescind Fair Price Provision                              C by C       FOR

      M0617   Adjourn Meeting                                           C by C       C by C

      M0618   Eliminate Right to Call Special Meeting                   AGAINST     AGAINST

      M0619   Restrict Right to Call Special Meeting                    AGAINST     AGAINST

      M0621   Require Advance Notice for Shareholder                    C by C       FOR
              Proposals/Nominations

      M0622   Consider Non-Financial Effects of Mergers                 AGAINST     AGAINST

      M0627   Permit Board to Amend Bylaws Without Shareholder          C by C       FOR
              Consent

      M0629   Waive Control Share Acquisition Provision                 C by C       C byC






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VI.     M0600s Management Proposals - Antitakeover Related (Cont.)



Agenda Code and Description                                             ISS          Client
                                                                       Policy        Policy

      M0630   Renew Shareholder Rights Plan (Poison Pill)               C by C      Against

      M0650   Adopt Double Voting Rights for Long-Term Registered       AGAINST     Against
              Shareholders

      M0651   Adopt Increased Dividends for Long-Term Registered        AGAINST     Against
              Shareholders

      M0652   Renew Partial Takeover Provision                          C by C       C by C

      M0653   Authorize Board to Issue Shares in the Event of a Public  AGAINST     Against
              Tender Offer or Share Exchange Offer

      M0654   Authorize Board to Repurchase Shares in the Event of a    AGAINST     Against
      Public Tender Offer or Share Exchange Offer

      M0655   Allow Board to Use All Outstanding Capital Authorizations AGAINST     Against

      M0656   Create/Eliminate Special Share Held By Government         C by C       C by C

      M0657   Adopt New Articles/Charter--Privatization-Related         C by C       C by C

      M0658   Approve/Amend Stock Ownership Limitations                 C by C       C by C

      M0659   Approve Reduction in Share Ownership Disclosure           C by C       CbyC
      Threshold

      M0660   Amend Articles/Charter--Governance-Related                C by C       C by C

      M0661   Company-Specific--Governance-Related                      C by C       C by C






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VII.    S0100s Shareholder Proposals - Routine Business



Agenda Code and Description                                             ISS          Client
                                                                       Policy        Policy

      S0101   Rotate Annual Meeting Location                            AGAINST     AGAINST

      S0102   Change Date/Time of Annual Meeting                        AGAINST     AGAINST

      S0106   Initiate Payment of Cash Dividend                         AGAINST     AGAINST

      S0107   Separate Chairman and CEO Positions                       C by C       C by C

      S0108   Liquidate Company Assets and Distribute Proceeds          C by C       C by C

      S0110   Establish Shareholder Advisory Committee                  C by C       C by C

      S0115   Company-Specific -- Miscellaneous                         C by C       C by C

      S0118   Convert Closed-End Fund to Open-End Fund                  C by C       C by C






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VIII.   S0200s Shareholder Proposals - Director Related



Agenda Code and Description                                             ISS          Client
                                                                       Policy        Policy

      S0201   Declassify the Board of Directors                         FOR         FOR

      S0202   Establish Term Limits for Directors                       AGAINST     AGAINST

      S0203   Establish a Nominating Committee                          FOR          FOR

      S0204   Establish a Compensation Committee                        FOR          FOR

      S0205   Establish Other Board Committee                           C by C       C by C

      S0207   Restore or Provide for Cumulative Voting                  C by C      AGAINST

      S0209   Establish Director Stock Ownership Requirement            AGAINST     AGAINST

      S0211   Establish Mandatory Retirement Age for Directors          AGAINST      AGAINST

      S0212   Require a Majority vote for the Election of Directors     C by C       C by C

      S0214   Remove Existing Directors                                 C by C       C by C

      S0215   Require Majority of Independent Directors on Board        C by C       FOR

      S0217   Provide for Special Interest Representation on Board      C by C      AGAINST

      S0219   Limit Composition of Committee(s) to Independent          C by C       FOR
              Directors

      S0220   Require Director Nominee Qualifications                   C by C      AGAINST

      S0222   Company-Specific--Board-Related                           C by C       C by C

      S0223   Require Directors Fees to be Paid in Stock                AGAINST     AGAINST

      S0225   Change Size of Board of Directors                         C by C       C by C

      S0227   Add Women and Minorities to the Board                     C by C       FOR

      S0230   Require Two Candidates for Each Board Seat                AGAINST     AGAINST

      S0233   Amend Articles/Bylaws/Charter-Filling Vacancies           C by C       C by C

      S0234   Amend Articles/Bylaws/Charter-Removal of Directors        C by C       C by C

      S0235   Amend Articles/Bylaws/Charter-Call Special Meetings       C by C       C by C






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VIII. S0200s Shareholder Proposals - Director Related (Cont.)



Agenda Code and Description                                             ISS          Client
                                                                       Policy        Policy

      S0236   Amend Vote Requirements to Amend Articles/                C by C       C by C
              Bylaws/Charter

      S0237   Amend Director/Officer Indemnification/Liability          C by C       C by C
              Provisions

      S0250   Elect a Shareholder-Nominee to the Board                  C by C       C by C







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IX.     S0300s Shareholder Proposals - Corporate Governance



Agenda Code and Description                                             ISS          Client
                                                                       Policy        Policy

      S0302   Submit Shareholder Rights Plan (Poison Pill) to           FOR          FOR
              Shareholder Vote

      S0304   Provide for Confidential Voting                           FOR         FOR

      S0306   Submit Acquisition Offer(s) for Shareholder Vote          FOR          FOR

      S0307   Restore Preemptive Rights of Shareholders                 C by C       C by C

      S0311   Reduce Supermajority Vote Requirement                     FOR          For

      S0318   Eliminate or Restrict Severance Agreements                C by C       C by C
              (Change-in-Control)

      S0319   Reincorporate in Another State [  ]                       C by C       C by C

      S0320   Submit Preferred Stock Issuance to Vote                   C by C       C by C


      S0321   Submit Severance Agreement (Change-in-Control) to         FOR          FOR
              Shareholder Vote

      S0326   Amend Articles/Bylaws/Charter to Remove                   FOR         AGAINST
              Antitakeover Provisions


      S0329   Eliminate Discretionary Voting of Unmarked Proxies        AGAINST     Against


      S0330   Eliminate Cumulative Voting                               FOR          For

      S0332   Amend Terms of Existing Poison Pill                       C by C       C by C

      S0350   Amend Articles to Limit the Bank's Authority to Exercise  C by C       C by C
              Votes at AGMs as Proxy for Shareholders

      S0351   Initiate Special Investigation to Determine if the Bank   C by C       C by C
              Property Voted Proxies in the Previous Five Years

      S0352   Company-Specific--Governance-Related                      C by C       C by C





*BONY supports shareholder proposals to submit poison pills to shareholder vote;
BONY votes against management proposals for poison pills.

*BONY does not support severance packages of greater than three (3) times total
compensation; BONY supports severance packages at three (3) or less times total
compensation.





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X.      S0400s Shareholder Proposals - Social / Human Rights



Agenda Code and Description                                             ISS          Client
                                                                       Policy        Policy

      S0411   MacBride Principles                                       C by C      AGAINST
      SO413    Report on MacBride Principles                            C by C      AGAINST

      S0414   ILO Standards                                             C by C      Against

      S0415   Vendor Standards                                          C by C      Against

      S0417   Workplace Code of Conduct                                 C by C      Against

      S0420   Burma-Related                                             C by C      Against

      S0424   Report on Maquiladora Operations                          C by C      AGAINST

      S0425   China Principles                                          C by C      Against

      S0426   Human Rights-Related                                      C by C      Against






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XI.     S0500s Shareholder Proposals - Compensation



Agenda Code and Description                                             ISS          Client
                                                                       Policy        Policy

      S0501   Limit/Prohibit Awards to Executives                       C by C      AGAINST

      S0503   Increase Disclosure of Executive Compensation             C by C      AGAINST

      S0504   Limit Executive Compensation                              C by C      AGAINST

      S0507   Report on Executive Compensation                          C by C      AGAINST

      S0508   Submit Executive Compensation to Vote                     C by C      AGAINST

      S0509   Eliminate Outside Directors' Retirement Benefits          FOR          FOR

      S0510   Link Executive Compensation to Social Issues              C by C      Against

      S0511   Company-Specific--Compensation-Related                    C by C       C by C


      S0512   Performance-Based/Indexed Options                         C by C       C by C


      S0513   Put Repricing of Stock Options to Shareholder Vote        FOR          For






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XII.    S0600s Shareholder Proposals - General Economic Issues



Agenda Code and Description                                             ISS          Client
                                                                       Policy        Policy

      S0602   Report on Bank Lending Policies                           C by C      AGAINST

      S0614   International Finance                                     C by C      AGAINST

      S0615   Avoid Export of U.S. Jobs (Outsourcing)                   C by C      AGAINST

      S0616   Adopt High-Performance Workplace Policy                   C by C

      S0617   Hire Advisor to Maximize Shareholder Value                C by C      AGAINST

      S0618   Seek Sale of Company/Assets                               C by  C      C by C

      S0619   Endorse Efforts of G-7 Ministers                          C by C      AGAINST






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XIII.   S0700s Shareholder Proposals - Health / Environment



Agenda Code and Description                                             ISS          Client
                                                                       Policy        Policy

      S0702   Advertising Standards                                     C by C      AGAINST

      S0703   Tobacco-Related--Miscellaneous                            C by C      AGAINST

      S0704   Tobacco-Related--Prepare Report                           C by C      AGAINST

      S0706   Abortion-Related Activities                               C by C      Against

      S0708   Reduce/Eliminate Toxic Wastes or Emissions or Related     C by C       C by C

      S0709   Nuclear Power-Related                                     C by C       C by C

      S0720   Alcohol-Related                                           C by C      AGAINST

      S0725   Weapon-Related                                            C by C      AGAINST

      S0726   Adopt Conservation Policy                                 C by C      AGAINST

      S0727   Report on Foreign Military Sales/Defense Business         C by C      AGAINST

      S0728   CERES Principles                                          C by C      AGAINST

      S0729   Drug Pricing                                              C by C      AGAINST

      S0729   Report - Drug Reimportation                               C by C       C by C

      S0730   Report on Environmental Policies (View other codes        C by C      AGAINST
              as well)

      S0730   Report - Operations in Protected/Ecologically             C by C       C by C
              Sensitive Areas

      S0732   Spin Off Tobacco - Related Business                       C by C      AGAINST

      S0734   Cease Tobacco - Related Advertising                       C by C      AGAINST

      S0735   Health Care-Related                                       C by C      AGAINST

      S0736   Genetically Modified Organisms (GMO)                      C by C      Against

      S0740   Environment Related--Miscellaneous (View other codes      C by C       Against
              as well)

      S0741   ANWR - Atlantic National Wildlife Refugee                 C by C       Against

      S0742   Reports - Green House/Global Warming                      C by C       C by C

      S0742   Reports on Kyoto Protocol Compliance                      C by C       C by C






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XIV.    S0800s Shareholder Proposals - Other / Misc.



Agenda Code and Description                                             ISS          Client
                                                                       Policy        Policy

      S0805   Report on Government Service of Employees                 C by C      AGAINST

      S0806   Charitable Contributions                                  C by C      AGAINST

      S0807   Political Contributions/Activities                        C by C      AGAINST

      S0810   Company-Specific -- Shareholder Miscellaneous             C by C      AGAINST

      S0810   Board Interlock - Directors on Common Boards              C by C       C by C

      S0812   EEOC-Related Activities                                   C by C      AGAINST

      S0814   Glass Ceiling                                             C by C      Against







XV.     S0900s Shareholder Proposals - Other / Misc.



Agenda Code and Description                                             ISS          Client
                                                                       Policy        Policy

        S0999  Reports - Concentrated Area Feeding Operations (CAFOs)   C by C       C by C

        S0999  Disclosure of Land Use/Real Estate development           C by C       C by C

        S0999  Reports to Phase out the use of Animals in testing       C by C       C by C





Special Instructions

M0501 - M0535:  Use the following evaluation method:
If dilution is greater than 30 percent - vote AGAINST
If strike price is 10 percent or more below fair market value - vote AGAINST

Exhibit Caption

(a)	Articles of Amendment and Restatement

(b)	Amended and Restated Bylaws

(d)(1)

Investment Advisory Agreement between the Registrant and XShares Advisors LLC

(d)(2)

Sub-Advisory Agreement between XShares Advisors LLC and Amerivest Investment Management, LLC

(d)(3)

Sub-Advisory Agreement between XShares Advisors LLC and BNY Investment Advisors

(e)(1)

Distribution Agreement between the Registrant and ALPS Distributors, Inc.

(e)(2)

Form of Authorized Participant Agreement

(g)(1)

Custody Agreement between the Registrant and The Bank of New York

(g)(2)

Foreign Custody Manager Agreement between the Registrant and The Bank of New York

(h)(1)

Fund Administration and Accounting Agreement between the Registrant and The Bank of New York

(h)(2)

Transfer Agency and Service Agreement between the Registrant and The Bank of New York

(h)(3)

Form of Securities Lending Agreement between the Registrant and The Bank of New York

(h)(4)

Chief Compliance Officer Services Agreement between the Registrant and ALPS Fund Services, Inc.

(h)(5)

Form of Participation Agreement between the Registrant and an Acquiring Fund

(h)(6)

Operating Expenses Limitation Agreement: Filed herewith.

(i)(1)

Opinion and Consent of Paul, Hastings, Janofsky & Walker LLP

(i)(2)

Opinion of Venable LLP

(j)	Consent of Eisner LLP

(l)	Form of Letter of Representations between the Registrant and The Depository Trust Company

(p)(1)

Registrant’s Code of Ethics

(p)(2)

XShares Advisors LLC’s Code of Ethics

(p)(3)

Amerivest Investment Management, LLC’s Code of Ethics

(p)(4)

BNY Investment Advisors’ Code of Ethics

(q)(1)

Powers of Attorney

(q)(2)

Secretary Certification of Board of Directors Action

                                                                     Exhibit (a)


                                TDAX FUNDS, INC.
                                ----------------

                      ARTICLES OF AMENDMENT AND RESTATEMENT


THIS IS TO CERTIFY THAT:

         FIRST: TDAX Funds, Inc., a Maryland corporation (the "Corporation"),
desires to amend and restate its charter as currently in effect and as
hereinafter amended.

         SECOND: The following provisions are all the provisions of the charter
currently in effect and as hereinafter amended:


                                ARTICLE I - NAME

                  The name of the corporation (hereinafter called the
"Corporation") is:

                                TDAX Funds, Inc.


                              ARTICLE II - PURPOSES

                  The Corporation is formed for the purpose of carrying on any
lawful business, which may include acting as an open-end management investment
company registered with the Securities and Exchange Commission under the
Investment Company Act of 1940, as amended (the "Investment Company Act"), and
to engage in any lawful act or activity for which corporations may be organized
under the general laws of the State of Maryland as now or hereafter in force.


                ARTICLE III - PRINCIPAL OFFICE AND RESIDENT AGENT

                  The address of the principal office of the Corporation within
the State of Maryland is 300 East Lombard Street, Baltimore, Maryland 21202 in
care of The Corporation Trust Incorporated. The resident agent of the
Corporation in the State of Maryland is The Corporation Trust Incorporated, 300
East Lombard Street, Baltimore, Maryland 21202, a Maryland corporation.


                               ARTICLE IV - STOCK

                  1. The Corporation is authorized to issue 12,500,000,000
shares, all of which shall be Common Stock, $.0001 par value per share (the
"Common Stock"), and having an aggregate par value of $1,250,000, classified and
designated as follows:





--------------------------------------------------------------------------------
                                 Series                  Number of Shares

--------------------------------------------------------------------------------
TDAX Independence 2010 Exchange-Traded Fund                2,500,000,000

--------------------------------------------------------------------------------
TDAX Independence 2020 Exchange-Traded Fund                2,500,000,000

--------------------------------------------------------------------------------
TDAX Independence 2030 Exchange-Traded Fund                2,500,000,000

--------------------------------------------------------------------------------
TDAX Independence 2040 Exchange-Traded Fund                2,500,000,000

--------------------------------------------------------------------------------
TDAX Independence In-Target Exchange-Traded Fund           2,500,000,000

--------------------------------------------------------------------------------

Any series of stock established herein and hereafter established are each
referred to herein as a "Series." The Board of Directors may classify any
unissued shares of Common Stock from time to time in one or more Series of stock
or classes of a Series. Any class of a Series of Common Stock shall be referred
to herein individually as a "Class" and collectively, together with any other
class or classes of such Series from time to time established, as the "Classes".
The Board of Directors may classify any unissued shares of stock of the
Corporation and reclassify any previously classified but unissued shares of any
Series or Class of stock from time to time in one or more Series or Classes of
stock. Prior to issuance of classified or reclassified shares of any Series or
Class, the Board of Directors by resolution shall: (a) designate that Series or
Class to distinguish it from all other Series or Classes of stock of the
Corporation; (b) specify the number of shares to be included in the Series or
Class; (c) set or change, subject to the express terms of any Series or Class of
stock of the Corporation outstanding at the time, the preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends or other
distributions, qualifications and terms and conditions of redemption for each
Series or Class; and (d) cause the Corporation to file articles supplementary
with the State Department of Assessments and Taxation of Maryland ("SDAT"). Any
of the terms of any Series or Class of stock may be made dependent upon facts or
events ascertainable outside the charter of the Corporation (the "Charter"),
including determinations by the Board of Directors or other facts or events
within the control of the Corporation, and may vary among holders thereof,
provided that the manner in which such facts, events or variations shall operate
upon the terms of such Series or Class of stock is clearly and expressly set
forth in the articles supplementary or other charter document filed with the
SDAT.

                  2. If shares of one Series or Class of stock are classified or
reclassified into shares of another Series or Class of stock pursuant to this
Article IV, the number of authorized shares of the former Series or Class shall
be automatically decreased and the number of shares of the latter Series or
Class shall be automatically increased, in each case by the number of shares so
classified or reclassified, so that the aggregate number of shares of stock of
all Series and Classes that the Corporation has authority to issue shall not be
more than the total number of shares of stock set forth in the first sentence of
this Article IV, Section 1.


                                      -2-



                  3. The Board of Directors shall have power to increase or
decrease, from time to time, the aggregate number of shares of stock, or of any
Series or Class of stock, that the Corporation shall have the authority to
issue.

                  4. Subject to the provisions of the Charter, the Board of
Directors shall have the power to cause the Corporation to issue shares of
Common Stock of the Corporation from time to time, for such consideration which
may consist of, among other things, cash and/or securities as may be fixed from
time to time pursuant to the direction of the Board of Directors, subject to
applicable requirements of the Investment Company Act. All stock, upon issuance
against receipt of the consideration specified by the Board of Directors, shall
be fully paid and nonassessable. The Board of Directors may, by resolution,
determine that shares of any Series or Class of the Corporation may be issued
only in specified Creation Units (as defined in Section 12(a) of this Article
IV).

                  5. As more fully set forth hereafter, the assets and
liabilities and the income and expenses of each Series or Class of the
Corporation's stock shall be determined separately from those of each other
Series or Class of the Corporation's stock and, accordingly, the net asset
value, the dividends and distributions payable to holders, and the amounts
distributable in the event of liquidation or dissolution of the Corporation to
holders of shares of the Corporation's stock may vary from Series to Series or
Class to Class. In the event that there are any assets, income earnings, profits
or proceeds which are not readily identifiable as belonging to any particular
series (collectively, "General Assets"), such General Assets shall be allocated
by or under the direction of the Board of Directors to and among one or more
Series and Classes in such a manner and on such basis as the Board of Directors
in its sole discretion shall determine.

                  6. Except as otherwise provided herein, all consideration
received by the Corporation for the issuance or sale of shares of a Series or
Class of the Corporation's stock, together with all funds derived from any
investment and reinvestment thereof and any General Assets allocated to such
Series or Class, shall irrevocably belong to that Series or Class for all
purposes, subject only to any reorganization or automatic conversion of one
Series or Class of stock into another, as hereinafter provided for, and to the
rights of creditors of such Series or Class, and shall be so recorded upon the
books of account of the Corporation, and are herein referred to as "assets
belonging to" such Series or Class.

                  7. The assets belonging to each Series or Class shall be
charged with the debts, liabilities, obligations and expenses incurred or
contracted for or otherwise existing with respect to such Series or Class and
with such Series' or Class' share of the general liabilities of the Corporation,
in the latter case in the proportion that the net asset value of such Series or
Class bears to the net asset value of all Series and Classes or as otherwise
determined by the Board of Directors in accordance with applicable law. The
determination of the Board of Directors shall be conclusive as to the allocation
of debts, liabilities, obligations and expenses, including accrued expenses and
reserves, to a Series or Class. The debts, liabilities, obligations and expenses
incurred or contracted for or otherwise existing with respect to a Series or
Class are enforceable with respect to that Series or Class only and not against
the assets of the Corporation generally or any other Series or Class of stock of
the Corporation.



                                      -3-



                  8. The assets attributable to the Classes of a Series shall be
invested in the same investment portfolio of the Corporation, and
notwithstanding the foregoing provisions of paragraphs 6 and 7 of this Article
IV, the allocation of investment income and realized and unrealized capital
gains and losses and expenses and liabilities of the Corporation and of any
Series among the Classes of Common Stock of each Series shall be determined by
the Board of Directors in a manner that is consistent with the Investment
Company Act. The determination of the Board of Directors shall be conclusive as
to the allocation of investment income and realized and unrealized capital gains
and losses, expenses and liabilities, including accrued expenses and reserves,
and assets to one or more particular Series or Classes.

                  9. Shares of each Series and Class of stock shall be entitled
to such dividends or distributions, in cash, property or additional shares of
stock of the same or another Series or Class, as may be authorized from time to
time by the Board of Directors, by resolution adopted from time to time, or
pursuant to a standing resolution or resolutions adopted only once or with such
frequency as the Board of Directors may determine, and declared by the
Corporation with respect to such Series or Class. The nature of in-kind property
distributions may vary among the holders of a Series or Class, provided that the
amount of the distribution per share, as determined by the Board of Directors,
shall be equivalent for all holders of such Series or Class. Specifically, and
without limiting the generality of the foregoing, the dividends and
distributions of investment income and capital gains with respect to the
different Series and with respect to the Class may vary with respect to each
such Series and Class to reflect differing allocations of the expenses of the
Corporation and the Series among the holders of such Classes and any resultant
differences between the net asset values per share of such Classes, to such
extent and for such purposes as the Board of Directors may deem appropriate. The
Board of Directors may determine that dividends may be payable only with respect
to those shares of stock that have been held of record continuously by the
stockholder for a specified period prior to the record date of the date of the
distribution.

                  10. Except as provided below, on each matter submitted to a
vote of the stockholders, each holder of stock shall be entitled to one vote (1)
for each share standing in such stockholder's name on the books of the
Corporation or (2) if approved by the Board of Directors and pursuant to the
issuance of an exemptive order from the Securities and Exchange Commission (the
"Commission"), for each dollar of net asset value per share of a Class or
Series, as applicable. Subject to any applicable requirements of the Investment
Company Act, or other applicable law, all holders of shares of stock shall vote
as a single class except with respect to any matter which the Board of Directors
shall have determined affects only one or more (but less than all) Series or
Classes of stock, in which case only the holders of shares of the Series or
Classes affected shall be entitled to vote. Without limiting the generality of
the foregoing, and subject to any applicable requirements of the Investment
Company Act, or other applicable law, the holders of each of the Classes of each
Series shall have, respectively, with respect to any matter submitted to a vote
of stockholders (i) exclusive voting rights with respect to any such matter that
only affects the Series or Class of Common Stock of which they are holders,
including, without limitation, the provisions of any distribution plan adopted
by the Corporation pursuant to Rule 12b-1 under the Investment Company Act (a
"Plan") with respect to the Class of which they are holders and (ii) no voting
rights with respect to the provisions of any Plan that affects one or more of
such other Classes of Common Stock, but not the Class of which they are


                                      -4-



holders, or with respect to any other matter that does not affect the Class of
Common Stock of which they are holders.

                  11. In the event of the liquidation or dissolution of the
Corporation, stockholders of each Class of the Corporation's stock shall be
entitled to receive, as a Class, out of the assets of the Corporation available
for distribution to stockholders, but other than General Assets not attributable
to any particular Class of stock, the assets attributable to the Class less the
liabilities allocated to that Class; and the assets so distributable to the
stockholders of any Class of stock shall be distributed among such stockholders
in proportion to the number of shares of the Class held by them and recorded on
the books of the Corporation. In the event that there are any General Assets not
attributable to any particular Class of stock, and such assets are available for
distribution, the distribution shall be made to the holders of all Classes of a
Series in proportion to the net asset value of the respective Classes or as
otherwise determined by the Board of Directors.

                  12.(a) All shares of Common Stock now or hereafter authorized
shall be subject to redemption and redeemable at the option of the holder
thereof in accordance with and pursuant to procedures or methods prescribed or
approved by the Board of Directors and, in the case of any Series or Class now
or hereafter authorized, if so determined by the Board of Directors, shall be
redeemable only in aggregations of such number of shares and on such days as may
be determined by, or determined pursuant to procedures or methods prescribed by
or approved by, the Board of Directors from time to time with respect to such
Series or Class. The number of shares comprising an aggregation for purposes of
redemption or repurchase so, determined from time to time with respect to any
Series or Class, shall be referred to herein as a "Creation Unit" and
collectively, as "Creation Units". Initially, 200,000 shares of Common Stock
will comprise a Creation Unit for each Series.

                  The Board of Directors shall have the unrestricted power to
alter the number of shares constituting a Creation Unit for any Series or Class
by resolutions adopted by the Board of Directors at any time, including prior to
the time the Corporation commences operations. Each holder of a Creation Unit of
a Series, upon request to the Corporation accompanied by surrender of the
appropriate stock certificate or certificates in proper form for transfer if
certificates have been issued to such holder, or in accordance with such other
procedures as may from time to time be in effect if certificates have not been
issued, shall be entitled to require the Corporation to redeem all or any number
of such holder's shares of Common Stock standing in the name of such holder on
the books of the Corporation, but in the case of shares of any Series as to
which the Board of Directors has determined that such shares shall be redeemed
only in Creation Units, only in such Creation Units of shares of such Series as
the Board of Directors may determine from time to time in accordance with this
Section 12, at a redemption price per share equal to an amount determined by the
Board of Directors in accordance with any applicable laws and regulations;
provided that (i) such amount shall not exceed the net asset value per share
determined in accordance with this Article, and (ii) if so authorized by the
Board of Directors, the Corporation may, at any time and from time to time,
charge fees for effecting such redemption or repurchase, at such rate or rates
as the Board of Directors may establish, as and to the extent permitted under
the Investment Company Act. Such rates may vary depending on the type of
redemption or repurchase in question (e.g., a redemption or repurchase for cash
as


                                      -5-



opposed to a redemption or repurchase for portfolio securities). The redemption
price for shares may be payable in cash, securities, property or a combination
thereof, as determined by or at the direction of the Board of Directors from
time to time, whether the shares are redeemed in a Creation Unit or not.

                  Notwithstanding any other provision of the Charter, the Board
of Directors of the Corporation may suspend the right of the holders of Creation
Units of shares of any Series to require the Corporation to redeem such shares
(or may suspend any voluntary repurchase of such shares pursuant to the
provisions of the Charter) or postpone the date of payment of satisfaction upon
redemption of such shares during any Financial Emergency.

                  For the purpose of the Charter, a "Financial Emergency" is
defined as the whole or part of any period (i) during which the New York Stock
Exchange is closed, other than customary weekend and holiday closings, (ii)
during which trading on the New York Stock Exchange is restricted, (iii) during
which an emergency exists as a result of which disposal by the Corporation of
securities owned by such Series is not reasonably practicable or it is not
reasonably practicable for the Corporation fairly to determine the value of the
net assets of such Series, or (iv) during any other period when the Commission
(or any succeeding governmental authority) may for the protection of security
holders of the Corporation by order permit suspension of the right of redemption
or postponement of the date of payment on redemption.

                  (b) The proceeds of the redemption of a share of any Class or
Series of shares shall be reduced by the amount of any contingent deferred sales
charge, redemption fee or other amount payable on such redemption pursuant to
the terms of issuance of such share.

                  (c) Subject to the requirements of the Investment Company Act,
the Board of Directors may cause the Corporation to redeem at net asset value
all or any proportion of the outstanding shares of any Series or Class from a
holder (1) upon such conditions with respect to the maintenance of stockholder
accounts of a minimum amount as may from time to time be established by the
Board of Directors in its sole discretion or (2) upon such conditions
established by the Board of Directors in its sole discretion, for any other
purpose, including, without limitation, a reorganization or liquidation of one
or more Series or Classes.

                  (d) Subject to the following sentence, shares of stock of any
Series and Class of the Corporation which have been redeemed or otherwise
acquired by the Corporation shall constitute authorized but unissued shares of
stock of such Series and Class. In connection with a liquidation or
reorganization of any Series or Class in which all of the outstanding shares of
such Series or Class are redeemed by the Corporation, upon any such redemption
all such shares and all authorized but unissued shares of the applicable Series
or Class shall automatically be returned to the status of authorized but
unissued shares of Common Stock, without further designation as to Series or
Class.

                  13. At such times as may be determined by the Board of
Directors (or with the authorization of the Board of Directors, by the officers
of the Corporation) in accordance with the Investment Company Act and applicable
rules and regulations of the National Association of Securities Dealers, Inc.,
or any successor organization, and from time to time reflected in the

                                      -6-



registration statement of the Corporation (the "Corporation's Registration
Statement"), shares of a particular Series or Class of stock of the Corporation
or certain shares of a particular Class of stock of any Series of the
Corporation may be automatically converted into shares of another Class of stock
of such Series of the Corporation based on the relative net asset values of such
Classes at the time of conversion, subject, however, to any conditions of
conversion that may be imposed by the Board of Directors (or with the
authorization of the Board of Directors, by the officers of the Corporation) and
reflected in the Corporation's Registration Statement. The terms and conditions
of such conversion may vary within and among the Classes to the extent
determined by the Board of Directors (or with the authorization of the Board of
Directors, by the officers of the Corporation) and set forth in the
Corporation's Registration Statement.

                  14. All Classes of a particular Series of Common Stock of the
Corporation shall represent the same interest in the Corporation and have
identical voting, dividend, liquidation and other rights with any other shares
of Common Stock of that Series; provided, however, that notwithstanding anything
in the Charter of the Corporation to the contrary:

                           (i) Any Class of shares may be subject to such sales
         loads, contingent deferred sales charges, Rule 12b-1 fees,
         administrative fees, service fees or other fees, however designated, in
         such amounts as may be established by the Board of Directors from time
         to time in accordance with the Investment Company Act and the
         applicable rules and regulations of the National Association of
         Securities Dealers, Inc., or any successor organization.

                           (ii) Expenses related solely to a particular Class of
         a Series (including, without limitation, distribution expenses under a
         Rule 12b-1 plan and administrative expenses under an administration or
         service agreement, plan or other arrangement, however designated) shall
         be borne by that Class and shall be appropriately reflected (in the
         manner determined by the Board of Directors) in the net asset value,
         dividends, distributions and liquidation rights of the shares of that
         Class.

                  15. The Board of Directors may by resolution from time to time
authorize the repurchase by the Corporation, either directly or through an
agent, of shares upon such terms and conditions and for such consideration as
the Board of Directors shall deem advisable, out of funds legally available
therefor and at prices per share not in excess of the net asset value per share,
determined in accordance with this Article and to take all other steps deemed
necessary or advisable in connection therewith.

                  16. Except as otherwise permitted by the Investment Company
Act or any applicable rule, regulation or order of the Commission, payment of
the redemption or repurchase price of shares surrendered to the Corporation for
redemption pursuant to the provisions of this Article IV or for repurchase by
the Corporation pursuant to the provisions of this Article IV shall be made by
the Corporation within seven days after surrender of such shares to the
Corporation for such purpose. Any such payment may be made in whole or in part
in portfolio securities or in cash, as the Board of Directors shall deem
advisable, and no stockholder shall have the right, other than as determined by
or at the direction of the Board of Directors, to have shares


                                      -7-



redeemed or repurchased in cash, portfolio securities or property in any
particular combination thereof.

                  17. The holders of shares of Common Stock or other securities
of the Corporation shall have no preemptive rights to subscribe for new or
additional shares of its Common Stock or other securities or appraisal rights.


                                   ARTICLE V -
         PROVISIONS DEFINING, LIMITING AND REGULATING CERTAIN POWERS OF
             THE CORPORATION AND OF THE STOCKHOLDERS AND DIRECTORS

                  1. The number of directors of the Corporation shall be four
(4). The number of directors of the Corporation may be changed pursuant to the
Bylaws of the Corporation. The directors shall have such qualifications as are
provided in the Bylaws of the Corporation. The names of the individuals who
shall serve as directors of the Corporation until the next annual meeting of
stockholders and until their successors are duly elected and qualify are:

                              Anthony F. Dudzinski
                              Ernest J. Scalberg
                              Michael G. Smith
                              R. Charles Tschampion

                  2. Pursuant to the Corporation's election to be subject to
Section 3-804(b) and (c) of the Maryland General Corporation Law (the "MGCL"),
but subject to applicable requirements of the Investment Company Act, any and
all vacancies on the Board of Directors may be filled only by the affirmative
vote of a majority of the remaining directors in office, even if the remaining
directors do not constitute a quorum, and any director elected to fill a vacancy
shall serve for the remainder of the full term of the directorship in which such
vacancy occurred and until a successor is duly elected and qualifies.

                  3. The following provisions are inserted for the purpose of
defining, limiting and regulating the powers of the Corporation and of the Board
of Directors and stockholders. In addition to its other powers explicitly or
implicitly granted under the Charter, by law or otherwise, the Board of
Directors:

                  (a) has the exclusive power to make, alter, amend or repeal
the Bylaws of the Corporation;

                  (b) subject to applicable law, may from time to time determine
whether, to what extent, at what times and places, and under what conditions and
regulations the accounts and books of the Corporation, or any of them, shall be
open to the inspection of the stockholders, and no stockholder shall have any
right to inspect any account, book or document of the Corporation except as
conferred by statute or as authorized by the Board of Directors;



                                      -8-



                  (c) is authorized to adopt procedures for determination of and
to maintain constant the net asset value of shares of any Series or Class of the
Corporation's stock.

                  4. Notwithstanding any provision of the MGCL requiring a
greater proportion than a majority of the votes entitled to be cast by holders
of shares of all Series or Classes, or any Series or Class, of the Corporation's
stock in order to take or authorize any action, any such action may be taken or
authorized upon the concurrence of holders of shares entitled to cast a majority
of the aggregate number of votes entitled to be cast thereon, subject to any
applicable requirements of the Investment Company Act.

                  5. The presence in person or by proxy of the holders of shares
entitled to cast one-third of the votes entitled to be cast (without regard to
Series or Class) shall constitute a quorum at any meeting of the stockholders,
except with respect to any matter which, under applicable statutes, regulatory
requirements or the Charter, requires approval by a separate vote of one or more
Series or Classes of stock, in which case the presence in person or by proxy of
the holders of shares entitled to cast one-third of the votes entitled to be
cast by holders of shares of each Series or Class entitled to vote as a Series
or Class on the matter shall constitute a quorum.

                  6. Any determination made in good faith by or pursuant to the
direction of the Board of Directors, as to the amount of the assets, debts,
obligations, or liabilities of the Corporation, as to the amount of any reserves
or charges set up and the propriety thereof, as to the time of or purpose for
creating such reserves or charges, as to the use, alteration or cancellation of
any reserves or charges (whether or not any debt, obligation, or liability for
which such reserves or charges shall have been created shall be then or
thereafter required to be paid or discharged), as to the value of or the method
of valuing any investment owned or held by the Corporation, as to market value
or fair value of any investment or fair value of any other asset of the
Corporation, as to the allocation of any asset of the Corporation to a
particular Class or Classes of the Corporation's stock, as to the charging of
any liability of the Corporation to a particular Class or Classes of the
Corporation's stock, as to the number of shares of the Corporation outstanding,
as to the estimated expense to the Corporation in connection with purchases of
its shares, as to the ability to liquidate investments in orderly fashion, or as
to any other matters relating to the issue, sale, redemption or other
acquisition or disposition of investments or shares of the Corporation, shall be
final and conclusive and shall be binding upon the Corporation and all holders
of its shares, past, present and future, and shares of the Corporation are
issued and sold on the condition and understanding that any and all such
determinations shall be binding as aforesaid.


            ARTICLE VI - LIMITATION OF LIABILITY AND INDEMNIFICATION

                  1. To the maximum extent that Maryland law in effect from time
to time permits limitation of the liability of directors and officers of a
corporation, no present or former director or officer of the Corporation shall
be liable to the Corporation or its stockholders for money damages.



                                      -9-



                  2. The Corporation shall have the power, to the maximum extent
permitted by Maryland law in effect from time to time, to obligate itself to
indemnify, and to pay or reimburse reasonable expenses in advance of final
disposition of a proceeding to, (a) any individual who is a present or former
director or officer of the Corporation or (b) any individual who, while a
director or officer of the Corporation and at the request of the Corporation,
serves or has served as a director, officer, partner or trustee of another
corporation, real estate investment trust, partnership, joint venture, trust,
employee benefit plan or any other enterprise from and against any claim or
liability to which such person may become subject or which such person may incur
by reason of his status as a present or former director or officer of the
Corporation. The Corporation shall have the power, with the approval of the
Board of Directors, to provide such indemnification and advancement of expenses
to a person who served a predecessor of the Corporation in any of the capacities
described in (a) or (b) above and to any employee or agent of the Corporation or
a predecessor of the Corporation.

                  3. The provisions of this Article VI shall be subject to the
limitations of the Investment Company Act.

                  4. Neither the amendment nor repeal of this Article VI, nor
the adoption or amendment of any other provision of the Charter or Bylaws
inconsistent with this Article VI, shall apply to or affect in any respect the
applicability of the preceding sections of this Article VI with respect to any
act or failure to act which occurred prior to such amendment, repeal or
adoption.


                            ARTICLE VII - AMENDMENTS

                  The Corporation reserves the right to amend, alter, change or
repeal any provision contained in its Charter in the manner now or hereafter
prescribed by the laws of the State of Maryland, including any amendment which
alters the contract rights, as expressly set forth in the Charter, of any
outstanding stock, and all rights conferred upon stockholders herein are granted
subject to this reservation.


                  THIRD: The amendment and restatement of the Charter as
hereinabove set forth have been duly advised by the Board of Directors and
approved by the stockholders of the Corporation as required by law.

                  FOURTH: The current address of the principal office of the
Corporation is as set forth in Article III of the foregoing amendment and
restatement of the Charter.

                  FIFTH: The name and address of the Corporation's current
resident agent is as set forth in Article III of the foregoing amendment and
restatement of the Charter.

                  SIXTH: The number of directors of the Corporation and the
names of those currently in office are as set forth in Article V of the
foregoing amendment and restatement of the Charter.



                                      -10-



                  SEVENTH: The total number of shares of stock which the
Corporation had authority to issue immediately prior to this amendment and
restatement was 100,000 shares of Common Stock, $.001 par value per share. The
aggregate par value of all shares of stock having par value was $100.

                  EIGHTH: The total number of shares of stock which the
Corporation has authority to issue pursuant to the foregoing amendment and
restatement of the charter is 12,500,000,000 shares of Common Stock, $.0001 par
value per share. The aggregate par value of all authorized shares of stock
having par value is $1,250,000.

                  The undersigned President acknowledges these Articles of
Amendment and Restatement to be the corporate act of the Corporation and, as to
all matters or facts required to be verified under oath, the undersigned
President acknowledges that, to the best of his knowledge, information and
belief, these matters and facts are true in all material respects and that this
statement is made under the penalties for perjury.


                            [SIGNATURE PAGE FOLLOWS]



                                      -11-





                  IN WITNESS WHEREOF, the Corporation has caused these Articles
of Amendment and Restatement to be signed in its name and on its behalf by its
President and attested to by its Secretary on this 24th day of July, 2007.

ATTEST:                                     TDAX FUNDS, INC.




/s/ David W. Jaffin                         By:/s/ David Kelley          (SEAL)
--------------------------------------         --------------------------

Secretary                                      President




                                      -12-




                                                                     Exhibit (b)

                                TDAX FUNDS, INC.

                           AMENDED AND RESTATED BYLAWS


                                    ARTICLE I
                                     OFFICES

         SECTION 1. Principal Office. The principal office of the Corporation in
the State of Maryland shall be located at such place as the Board of Directors
may designate.

         SECTION 2. Additional Offices. The Corporation may have additional
offices, including a principal executive office, at such places as the Board of
Directors may from time to time determine or the business of the Corporation may
require.

                                   ARTICLE II
                            MEETINGS OF STOCKHOLDERS

         SECTION 1. Place. Subject to Section 3(b)(4) of this Article 2, all
meetings of stockholders shall be held at the principal executive office of the
Corporation or at such other place as shall be set by the Board of Directors and
stated in the notice of the meeting.

         SECTION 2. Annual Meeting. The Corporation shall not be required to
hold an annual meeting of stockholders in any year in which the election of
directors is not required to be acted upon under the Investment Company Act of
1940, as amended (the "1940 Act"). In the event that the Corporation is required
to hold a meeting of stockholders to elect directors under the 1940 Act, such
meeting shall be designated the annual meeting of stockholders for that year and
shall be held on a date and at the time set by the Board of Directors in
accordance with the Maryland General Corporation Law (the "MGCL"). An annual
meeting of stockholders called for any other reason shall be held on a date and
at the time during the month of October set by the Board of Directors.

         SECTION 3. Special Meetings.

             (a) General. The chairman of the board, president, chief executive
officer or Board of Directors may call a special meeting of the stockholders.
Subject to subsection (b) of this Section 3, a special meeting of stockholders
shall also be called by the secretary of the Corporation upon the written
request of stockholders entitled to cast not less than a majority of all the
votes entitled to be cast at such meeting.

             (b) Stockholder Requested Special Meetings.

                  (1) Any stockholder of record seeking to have stockholders
request a special meeting shall, by sending written notice to the secretary (the
"Record Date Request





Notice") by registered mail, return receipt requested, request the Board of
Directors to fix a record date to determine the stockholders entitled to request
a special meeting (the "Request Record Date"). The Record Date Request Notice
shall set forth the purpose of the meeting and the matters proposed to be acted
on at it, shall be signed by one or more stockholders of record as of the date
of signature (or their agents duly authorized in a writing accompanying the
Record Date Request Notice), shall bear the date of signature of each such
stockholder (or such agent) and shall set forth all information relating to each
such stockholder that must be disclosed in solicitations of proxies for election
of directors in an election contest (even if an election contest is not
involved), or is otherwise required, in each case pursuant to Regulation 14A (or
any successor provision) under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Upon receiving the Record Date Request Notice, the
secretary shall send the Record Date Request Notice promptly to the Board of
Directors and the Board of Directors may fix a Request Record Date. The Request
Record Date shall not precede and shall not be more than ten days after the
close of business on the date on which the resolution fixing the Request Record
Date is adopted by the Board of Directors. If the Board of Directors, within ten
days after the date on which a valid Record Date Request Notice is received,
fails to adopt a resolution fixing the Request Record Date, the Request Record
Date shall be the close of business on the 20th day after the first date on
which the Record Date Request Notice is received by the secretary.

                  (2) In order for any stockholder to request a special meeting,
one or more written requests for a special meeting signed and notarized by
stockholders of record (or their agents duly authorized in a writing
accompanying the request) as of the Request Record Date entitled to cast not
less than a majority (the "Special Meeting Percentage") of all of the votes
entitled to be cast at such meeting (the "Special Meeting Request") shall be
delivered to the secretary. In addition, the Special Meeting Request (a) shall
set forth the purpose of the meeting and the matters proposed to be acted on at
it (which shall be limited to those lawful matters set forth in the Record Date
Request Notice received by the secretary), (b) shall bear the date of signature
of each such stockholder (or such agent) signing the Special Meeting Request,
(c) shall set forth the name and address, as they appear in the Corporation's
books, of each stockholder signing such request (or on whose behalf the Special
Meeting Request is signed) and the class, series and number of all shares of
stock of the Corporation which are owned by each such stockholder, and the
nominee holder for, and number of, shares owned by such stockholder beneficially
but not of record, (d) shall be sent to the secretary by registered mail, return
receipt requested, and (e) shall be received by the secretary within 60 days
after the Request Record Date. Any requesting stockholder (or agent duly
authorized in a writing accompanying the revocation or the Special Meeting
Request) may revoke his, her or its request for a special meeting at any time by
written revocation delivered to the secretary.

                  (3) The secretary shall inform the requesting stockholders of
the reasonably estimated cost of preparing and mailing the notice of meeting
(including the Corporation's proxy materials). The secretary shall not be
required to call a special meeting upon stockholder request and such meeting
shall not be held unless, in addition to the documents required by paragraph (2)
of this Section 3(b), the secretary receives payment of such reasonably
estimated cost prior to the mailing of any notice of the meeting.


                                      -2-



                  (4) Except as provided in the next sentence, any special
meeting shall be held at such place, date and time as may be designated by the
Board of Directors. In the case of any special meeting called by the secretary
upon the request of stockholders (a "Stockholder Requested Meeting"), such
meeting shall be held at such place, date and time as may be designated by the
Board of Directors; provided, however, that the date of any Stockholder
Requested Meeting shall be not more than 90 days after the record date for such
meeting (the "Meeting Record Date"); and provided further that if the Board of
Directors fails to designate, within ten days after the date that a valid
Special Meeting Request is actually received by the secretary (the "Delivery
Date"), a date and time for a Stockholder Requested Meeting, then such meeting
shall be held at 2:00 p.m. local time on the 90th day after the Meeting Record
Date or, if such 90th day is not a Business Day (as defined below), on the first
preceding Business Day; and provided further that in the event that the Board of
Directors fails to designate a place for a Stockholder Requested Meeting within
ten days after the Delivery Date, then such meeting shall be held at the
principal executive office of the Corporation. In fixing a date for any special
meeting, the Board of Directors may consider such factors as it deems relevant
within the good faith exercise of business judgment, including, without
limitation, the nature of the matters to be considered, the facts and
circumstances surrounding any request for the meeting and any plan of the Board
of Directors to call an annual meeting or a special meeting. In the case of any
Stockholder Requested Meeting, if the Board of Directors fails to fix a Meeting
Record Date that is a date within 30 days after the Delivery Date, then the
close of business on the 30th day after the Delivery Date shall be the Meeting
Record Date. The Board of Directors may revoke the notice for any Stockholder
Requested Meeting in the event that the requesting stockholders fail to comply
with the provisions of paragraph (3) of this Section 3(b).

                  (5) If written revocations of requests for the special meeting
have been delivered to the secretary and the result is that stockholders of
record (or their agents duly authorized in writing), as of the Request Record
Date, entitled to cast less than the Special Meeting Percentage have delivered
requests for a special meeting to the secretary, and such requests have not been
revoked, the secretary shall: (i) if the notice of meeting has not already been
mailed, refrain from mailing the notice of the meeting and send to all
requesting stockholders who have not revoked such requests written notice of any
revocation of a request for the special meeting, or (ii) if the notice of
meeting has been mailed and if the secretary first sends to all requesting
stockholders who have not revoked requests for a special meeting written notice
of any revocation of a request for the special meeting and written notice of the
secretary's intention to revoke the notice of the meeting, revoke the notice of
the meeting at any time before ten days before the commencement of the meeting.
Any request for a special meeting received after a revocation by the secretary
of a notice of a meeting shall be considered a request for a new special
meeting.

                  (6) The Board of Directors may appoint independent inspectors
of elections to act as the agent of the Corporation for the purpose of promptly
performing a ministerial review of the validity of any purported Special Meeting
Request received by the secretary. The report of the inspector or inspectors
shall be prima facie evidence of the validity


                                      -3-



or invalidity of the Special Meeting Request. For the purpose of permitting the
inspectors to perform such review, no such purported request shall be deemed to
have been delivered to the secretary until the earlier of (i) five Business Days
after receipt by the secretary of such purported request and (ii) such date as
the independent inspectors certify to the Corporation that the valid requests
received by the secretary represent at least the Special Meeting Percentage.
Nothing contained in this paragraph (6) shall in any way be construed to suggest
or imply that the Corporation or any stockholder shall not be entitled to
contest the validity of any request, whether during or after such five Business
Day period, or to take any other action (including, without limitation, the
commencement, prosecution or defense of any litigation with respect thereto, and
the seeking of injunctive relief in such litigation).

                  (7) For purposes of these Bylaws, "Business Day" shall mean
any day that the New York Stock Exchange is open for trading.

         SECTION 4. Notice. Not less than ten nor more than 90 days before each
meeting of stockholders, the secretary shall give to each stockholder entitled
to vote at such meeting and to each stockholder not entitled to vote who is
entitled to notice of the meeting written or printed notice stating the time and
place of the meeting and, in the case of a special meeting or as otherwise may
be required by any statute, the purpose or purposes for which the meeting is
called, either by mail, by presenting it to such stockholder personally, by
leaving it at the stockholder's residence or usual place of business, by
overnight delivery service, by transmitting the notice by electronic mail or any
other electronic means or by any other means permitted by Maryland law. If
mailed, such notice shall be deemed to be given when deposited in the United
States mail addressed to the stockholder at the stockholder's address as it
appears on the records of the Corporation, with postage thereon prepaid.

         Subject to Section 11(a) of this Article II, any business of the
Corporation may be transacted at an annual meeting of stockholders without being
specifically designated in the notice, except such business as is required by
any statute to be stated in such notice. No business shall be transacted at a
special meeting of stockholders except as specifically designated in the notice.

         SECTION 5. Organization and Conduct. Every meeting of stockholders
shall be conducted by an individual appointed by the Board of Directors to be
chairman of the meeting or, in the absence of such appointment, by the chairman
of the board or, in the case of a vacancy in the office or absence of the
chairman of the board, by one of the following officers present at the meeting:
the vice chairman of the board, if there be one, the president, the vice
presidents in their order of rank and seniority, the secretary, the treasurer,
or, in the absence of such officers, a chairman chosen by the stockholders by
the vote of a majority of the votes cast by stockholders present in person or by
proxy. The secretary or, in the secretary's absence, an assistant secretary, or
in the absence of both the secretary and assistant secretaries, an individual
appointed by the Board of Directors or, in the absence of such appointment, an
individual appointed by the chairman of the meeting shall act as secretary. In
the event that the secretary presides at a meeting of the stockholders, an
assistant secretary, or in the absence of assistant secretaries, an


                                      -4-



individual appointed by the Board of Directors or the chairman of the meeting,
shall record the minutes of the meeting. The order of business and all other
matters of procedure at any meeting of stockholders shall be determined by the
chairman of the meeting. The chairman of the meeting may prescribe such rules,
regulations and procedures and take such action as, in the discretion of such
chairman, are appropriate for the proper conduct of the meeting, including,
without limitation, (a) restricting admission to the time set for the
commencement of the meeting; (b) limiting attendance at the meeting to
stockholders of record of the Corporation, their duly authorized proxies and
other such individuals as the chairman of the meeting may determine; (c)
limiting participation at the meeting on any matter to stockholders of record of
the Corporation entitled to vote on such matter, their duly authorized proxies
or other such individuals as the chairman of the meeting may determine; (d)
limiting the time allotted to questions or comments by participants; (e)
determining when the polls should be opened and closed; (f) maintaining order
and security at the meeting; (g) removing any stockholder or any other
individual who refuses to comply with meeting procedures, rules or guidelines as
set forth by the chairman of the meeting; and (h) concluding the meeting or
recessing or adjourning the meeting to a later date and time and at a place
announced at the meeting. Unless otherwise determined by the chairman of the
meeting, meetings of stockholders shall not be required to be held in accordance
with the rules of parliamentary procedure.

         SECTION 6. Quorum. At any meeting of stockholders, the presence in
person or by proxy of stockholders entitled to cast one-third of all the votes
entitled to be cast at such meeting shall constitute a quorum, except with
respect to any matter which, under the 1940 Act or other applicable statutes or
regulations or the charter of the Corporation, requires approval by a separate
vote of one or more classes of stock, in which case the presence in person or by
proxy of the holders of one-third of the shares of stock of each class required
to vote as a class on the matter shall constitute a quorum. This section shall
not affect any requirement under any statute or the charter of the Corporation
for the vote necessary for the adoption of any measure. If, however, such quorum
shall not be present at any meeting of the stockholders, the chairman of the
meeting shall have the power to adjourn the meeting from time to time to a date
not more than 120 days after the original record date without notice other than
announcement at the meeting. At such adjourned meeting at which a quorum shall
be present, any business may be transacted which might have been transacted at
the meeting as originally notified.

         The stockholders present either in person or by proxy, at a meeting
which has been duly called and convened, may continue to transact business until
adjournment, notwithstanding the withdrawal of enough stockholders to leave less
than a quorum.

         SECTION 7. Voting. When a quorum is present at any meeting, the
affirmative vote of a majority of the votes cast, or, with respect to any matter
requiring a class vote, the affirmative vote of a majority of the votes cast of
each class entitled to vote as a class on the matter, shall decide any matter
properly brought before such meeting (except that directors may be elected by
the affirmative vote of a plurality of the votes cast), unless a different vote
is required under the 1940 Act or other applicable statutes or regulations or
the charter of the Corporation. Each share may be voted for as many individuals
as there are directors to be elected and for whose election


                                      -5-



the share is entitled to be voted. Unless otherwise provided in the charter,
each outstanding share, regardless of class, shall be entitled to one vote on
each matter submitted to a vote at a meeting of stockholders.

         SECTION 8. Proxies. A stockholder may cast the votes entitled to be
cast by the shares of stock owned of record by the stockholder in person or by
proxy executed by the stockholder or by the stockholder's duly authorized agent
in any manner permitted by law. Such proxy or evidence of authorization of such
proxy shall be filed with the secretary of the Corporation before or at the
meeting. No proxy shall be valid more than eleven months after its date unless
otherwise provided in the proxy.

         SECTION 9. Voting of Stock by Certain Holders. Stock of the Corporation
registered in the name of a corporation, partnership, trust or other entity, if
entitled to be voted, may be voted by the president or a vice president, a
general partner or trustee thereof, as the case may be, or a proxy appointed by
any of the foregoing individuals, unless some other person who has been
appointed to vote such stock pursuant to a bylaw or a resolution of the
governing body of such corporation or other entity or agreement of the partners
of a partnership presents a certified copy of such bylaw, resolution or
agreement, in which case such person may vote such stock. Any director or other
fiduciary may vote stock registered in his or her name as such fiduciary, either
in person or by proxy.

         Shares of stock of the Corporation directly or indirectly owned by it
shall not be voted at any meeting and shall not be counted in determining the
total number of outstanding shares entitled to be voted at any given time,
unless they are held by it in a fiduciary capacity, in which case they may be
voted and shall be counted in determining the total number of outstanding shares
at any given time.

         The Board of Directors may adopt by resolution a procedure by which a
stockholder may certify in writing to the Corporation that any shares of stock
registered in the name of the stockholder are held for the account of a
specified person other than the stockholder. The resolution shall set forth the
class of stockholders who may make the certification, the purpose for which the
certification may be made, the form of certification and the information to be
contained in it; if the certification is with respect to a record date or
closing of the stock transfer books, the time after the record date or closing
of the stock transfer books within which the certification must be received by
the Corporation; and any other provisions with respect to the procedure which
the Board of Directors considers necessary or desirable. On receipt of such
certification, the person specified in the certification shall be regarded as,
for the purposes set forth in the certification, the stockholder of record of
the specified stock in place of the stockholder who makes the certification.

         SECTION 10. Inspectors. The Board of Directors, in advance of any
meeting, may, but need not, appoint one or more individual inspectors or one or
more entities that designate individuals as inspectors to act at the meeting or
any adjournment thereof. If an inspector or inspectors are not appointed, the
person presiding at the meeting may, but need not, appoint one


                                      -6-



or more inspectors. In case any person who may be appointed as an inspector
fails to appear or act, the vacancy may be filled by appointment made by the
Board of Directors in advance of the meeting or at the meeting by the chairman
of the meeting. The inspectors, if any, shall determine the number of shares
outstanding and the voting power of each, the shares represented at the meeting,
the existence of a quorum, the validity and effect of proxies, and shall receive
votes, ballots or consents, hear and determine all challenges and questions
arising in connection with the right to vote, count and tabulate all votes,
ballots or consents, and determine the result, and do such acts as are proper to
conduct the election or vote with fairness to all stockholders. Each such report
shall be in writing and signed by him or her or by a majority of them if there
is more than one inspector acting at such meeting. If there is more than one
inspector, the report of a majority shall be the report of the inspectors. The
report of the inspector or inspectors on the number of shares represented at the
meeting and the results of the voting shall be prima facie evidence thereof.

         SECTION 11. Advance Notice of Stockholder Nominees for Director and
Other Stockholder Proposals.

             (a) Annual Meetings of Stockholders.

                  (1) Nominations of individuals for election to the Board of
Directors and the proposal of other business to be considered by the
stockholders may be made at an annual meeting of stockholders (i) pursuant to
the Corporation's notice of meeting, (ii) by or at the direction of the Board of
Directors, or (iii) by any stockholder of the Corporation who was a stockholder
of record both at the time of giving of notice by the stockholder as provided
for in this Section 11(a) and at the time of the annual meeting, who is entitled
to vote at the meeting and who has complied with this Section 11(a).

                  (2) For nominations or other business to be properly brought
before an annual meeting by a stockholder pursuant to clause (iii) of paragraph
(a)(1) of this Section 11, the stockholder must have given timely notice thereof
in writing to the secretary of the Corporation and such other business must
otherwise be a proper matter for action by the stockholders. In any year in
which an annual meeting is to be held, to be timely, a stockholder's notice
shall set forth all information required under this Section 11 and shall be
delivered to the secretary at the principal executive office of the Corporation
not earlier than the 150th day prior to the anniversary of the date of mailing
of the notice for the preceding annual meeting nor later than 5:00 p.m., Eastern
Time, on the 120th day prior to the anniversary of the date of mailing of the
notice for the preceding annual meeting; provided, however, that in the event
that the date of the annual meeting is advanced or delayed by more than 30 days
from the anniversary of the date of the preceding annual meeting or in the event
that no annual meeting has previously been held, notice by the stockholder to be
timely must be so delivered not earlier than the 150th day prior to the date of
such annual meeting and not later than 5:00 p.m., Eastern Time, on the later of
the 120th day prior to the date of such annual meeting or the tenth day
following the day on which public announcement of the date of such meeting is
first made. The public announcement of a postponement or adjournment of an
annual meeting shall not commence a new time period for


                                      -7-



the giving of a stockholder's notice as described above. Such stockholder's
notice shall set forth (i) as to each individual whom the stockholder proposes
to nominate for election or reelection as a director, (A) the name, age,
business address and residence address of such individual, (B) the class, series
and number of any shares of stock of the Corporation that are beneficially owned
by such individual, (C) the date such shares were acquired and the investment
intent of such acquisition, (D) whether such stockholder believes any such
individual is, or is not, an "interested person" of the Corporation, as defined
in the 1940 Act and information regarding such individual that is sufficient, in
the discretion of the Board of Directors or any committee thereof or any
authorized officer of the Corporation, to make such determination and (E) all
other information relating to such individual that is required to be disclosed
in solicitations of proxies for election of directors in an election contest
(even if an election contest is not involved), or is otherwise required, in each
case pursuant to Regulation 14A (or any successor provision) under the Exchange
Act and the rules thereunder (including such individual's written consent to
being named in the proxy statement as a nominee and to serving as a director if
elected); (ii) as to any other business that the stockholder proposes to bring
before the meeting, a description of such business, the reasons for proposing
such business at the meeting and any material interest in such business of such
stockholder and any Stockholder Associated Person (as defined below),
individually or in the aggregate, including any anticipated benefit to the
stockholder and the Stockholder Associated Person therefrom; (iii) as to the
stockholder giving the notice and any Stockholder Associated Person, the class,
series and number of all shares of stock of the Corporation which are owned by
such stockholder and by such Stockholder Associated Person, if any, and the
nominee holder for, and number of, shares owned beneficially but not of record
by such stockholder and by any such Stockholder Associated Person; (iv) as to
the stockholder giving the notice and any Stockholder Associated Person covered
by clauses (ii) or (iii) of this paragraph (2) of this Section 11(a), the name
and address of such stockholder, as they appear on the Corporation's stock
ledger and current name and address, if different, and of such Stockholder
Associated Person; and (v) to the extent known by the stockholder giving the
notice, the name and address of any other stockholder supporting the nominee for
election or reelection as a director or the proposal of other business on the
date of such stockholder's notice.

                  (3) In any year an annual meeting of stockholders is to be
held, notwithstanding anything in this subsection (a) of this Section 11 to the
contrary, in the event that the number of directors to be elected to the Board
of Directors is increased and there is no public announcement of such action at
least 130 days prior to the anniversary of the date of mailing of the notice of
the preceding annual meeting, a stockholder's notice required by this Section
11(a) shall also be considered timely, but only with respect to nominees for any
new positions created by such increase, if it shall be delivered to the
secretary at the principal executive office of the Corporation not later than
5:00 p.m., Eastern Time, on the tenth day following the day on which such public
announcement is first made by the Corporation.

                  (4) For purposes of this Section 11, "Stockholder Associated
Person" of any stockholder shall mean (i) any person controlling, directly or
indirectly, or acting in concert with, such stockholder, (ii) any beneficial
owner of shares of stock of the Corporation


                                      -8-



owned of record or beneficially by such stockholder and (iii) any person
controlling, controlled by or under common control with such Stockholder
Associated Person.

             (b) Special Meetings of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought before
the meeting pursuant to the Corporation's notice of meeting. Nominations of
individuals for election to the Board of Directors may be made at a special
meeting of stockholders at which directors are to be elected (i) pursuant to the
Corporation's notice of meeting, (ii) by or at the direction of the Board of
Directors or (iii) provided that the Board of Directors has determined that
directors shall be elected at such special meeting, by any stockholder of the
Corporation who is a stockholder of record both at the time of giving of notice
provided for in this Section 11 and at the time of the special meeting, who is
entitled to vote at the meeting and who complied with the notice procedures set
forth in this Section 11. In the event the Corporation calls a special meeting
of stockholders for the purpose of electing one or more individuals to the Board
of Directors, any such stockholder may nominate an individual or individuals (as
the case may be) for election as a director as specified in the Corporation's
notice of meeting, if the stockholder's notice required by paragraph (2) of this
Section 11(a) shall be delivered to the secretary at the principal executive
office of the Corporation not earlier than the 150th day prior to such special
meeting and not later than 5:00 p.m., Eastern Time, on the later of the 120th
day prior to such special meeting or the tenth day following the day on which
public announcement is first made of the date of the special meeting and of the
nominees proposed by the Board of Directors to be elected at such meeting. The
public announcement of a postponement or adjournment of a special meeting shall
not commence a new time period for the giving of a stockholder's notice as
described above.

             (c) General.

                  (1) Upon written request by the secretary or the Board of
Directors or any committee thereof, any stockholder proposing a nominee for
election as a director or any proposal for other business at a meeting of
stockholders shall provide, within five Business Days of delivery of such
request (or such other period as may be specified in such request), written
verification, satisfactory, in the discretion of the Board of Directors or any
committee thereof or any authorized officer of the Corporation, to demonstrate
the accuracy of any information submitted by the stockholder pursuant to this
Section 11. If a stockholder fails to provide such written verification within
such period, the information as to which written verification was requested may
be deemed not to have been provided in accordance with this Section 11.

                  (2) Only such individuals who are nominated in accordance with
this Section 11 shall be eligible for election by stockholders as directors, and
only such business shall be conducted at a meeting of stockholders as shall have
been brought before the meeting in accordance with this Section 11. The chairman
of the meeting shall have the power to determine whether a nomination or any
other business proposed to be brought before the meeting was made or proposed,
as the case may be, in accordance with this Section 11.


                                      -9-



                  (3) For purposes of this Section 11, (a) the "date of mailing
of the notice" shall mean the date of the proxy statement for the solicitation
of proxies for election of directors and (b) "public announcement" shall mean
disclosure (i) in a press release reported by the Dow Jones News Service,
Associated Press, Business Wire, PR Newswire or comparable news service, (ii) in
a document publicly filed by the Corporation with the Securities and Exchange
Commission pursuant to the Exchange Act or the 1940 Act or (iii) in a document
posted on the Corporation's website.

                  (4) Notwithstanding the foregoing provisions of this Section
11, a stockholder shall also comply with all applicable requirements of state
law and of the Exchange Act and the rules and regulations thereunder with
respect to the matters set forth in this Section 11. Nothing in this Section 11
shall be deemed to affect any right of a stockholder to request inclusion of a
proposal in, nor the right of the Corporation to omit a proposal from, the
Corporation's proxy statement pursuant to Rule 14a-8 (or any successor
provision) under the Exchange Act.

         SECTION 12. Voting by Ballot. Voting on any question or in any election
may be viva voce unless the presiding officer shall order or any stockholder
shall demand that voting be by ballot.

                                   ARTICLE III
                                    DIRECTORS

         SECTION 1. General Powers. The business and affairs of the Corporation
shall be managed under the direction of its Board of Directors.

         SECTION 2. Number, Tenure and Qualifications. At any regular meeting or
at any special meeting called for that purpose, a majority of the entire Board
of Directors may establish, increase or decrease the number of directors,
provided that the number thereof shall never be less than the minimum number
required by the MGCL, nor more than ten, and further provided that the tenure of
office of a director shall not be affected by any decrease in the number of
directors. Any director may give notice to the Board of Directors at any time of
his or her resignation therefrom. Such resignation shall be effective upon its
receipt or at such later time specified therein.

         SECTION 3. Annual and Regular Meetings. A meeting of the Board of
Directors shall be held annually. The annual meeting may be held at such time
and place as shall be specified in a notice given as hereinafter provided for
special meetings of the Board of Directors. Regular meetings of the Board of
Directors shall be held from time to time at such places and times as provided
by the Board of Directors by resolution, without notice other than such
resolution.

         SECTION 4. Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the chairman of the board, the chief
executive officer, the president or by a majority of the directors then in
office. The person or persons authorized to call special


                                      -10-



meetings of the Board of Directors may fix any place as the place for holding
any special meeting of the Board of Directors called by them. The Board of
Directors may provide, by resolution, the time and place for the holding of
special meetings of the Board of Directors without notice other than such
resolution.

         SECTION 5. Emergency Meetings. Emergency meetings of the Board of
Directors may be called at any time by the chairman of the board, the president
or three directors after notice by personal delivery or by email, telephone,
facsimile transmission or courier to each director at his or her business or
residence address. At least four hours' notice shall be given of all emergency
meetings.

         SECTION 6. Notice. Notice of any special meeting of the Board of
Directors shall be delivered personally or by telephone, electronic mail,
facsimile transmission, United States mail or courier to each director at his or
her business or residence address. Except as otherwise provided in these Bylaws,
notice by personal delivery, telephone, electronic mail or facsimile
transmission shall be given at least 24 hours prior to the meeting. Notice by
United States mail shall be given at least three days prior to the meeting.
Notice by courier shall be given at least two days prior to the meeting.
Telephone notice shall be deemed to be given when the director or his or her
agent is personally given such notice in a telephone call to which the director
or his or her agent is a party. Electronic mail notice shall be deemed to be
given upon transmission of the message to the electronic mail address given to
the Corporation by the director. Facsimile transmission notice shall be deemed
to be given upon completion of the transmission of the message to the number
given to the Corporation by the director and receipt of a completed answer-back
indicating receipt. Notice by United States mail shall be deemed to be given
when deposited in the United States mail properly addressed, with postage
thereon prepaid. Notice by courier shall be deemed to be given when deposited
with or delivered to a courier properly addressed. Neither the business to be
transacted at, nor the purpose of, any annual, regular or special meeting of the
Board of Directors need be stated in the notice, unless specifically required by
statute or these Bylaws.

         SECTION 7. Quorum. A majority of the directors shall constitute a
quorum for transaction of business at any meeting of the Board of Directors,
provided that, if less than a majority of such directors are present at said
meeting, a majority of the directors present may adjourn the meeting from time
to time without further notice, and provided further that if, pursuant to
applicable law, the charter of the Corporation or these Bylaws, the vote of a
majority of a particular group of directors is required for action, a quorum
must also include a majority of such group.

         The directors present at a meeting which has been duly called and
convened may continue to transact business until adjournment, notwithstanding
the withdrawal of enough directors to leave less than a quorum.

         SECTION 8. Voting. The action of the majority of the directors present
at a meeting at which a quorum is present shall be the action of the Board of
Directors, unless the concurrence


                                      -11-



of a greater proportion is required for such action by applicable law, the
charter or these Bylaws. If enough directors have withdrawn from a meeting to
leave less than a quorum but the meeting is not adjourned, the action of the
majority of that number of directors necessary to constitute a quorum at such
meeting shall be the action of the Board of Directors, unless the concurrence of
a greater proportion is required for such action by applicable law, the charter
or these Bylaws.

         SECTION 9. Organization. At each meeting of the Board of Directors, the
chairman of the board or, in the absence of the chairman, the vice chairman of
the board, if any, shall act as chairman of the meeting. In the absence of both
the chairman and vice chairman of the board, the chief executive officer or in
the absence of the chief executive officer, the president or in the absence of
the president, a director chosen by a majority of the directors present, shall
act as chairman of the meeting. The secretary or, in his or her absence, an
assistant secretary of the Corporation, or in the absence of the secretary and
all assistant secretaries, a person appointed by the chairman of the meeting,
shall act as secretary of the meeting.

         SECTION 10. Telephone Meetings. Directors may participate in a meeting
by means of a conference telephone or similar communications equipment if all
persons participating in the meeting can hear each other at the same time.
Participation in a meeting by these means shall constitute presence in person at
the meeting.

         SECTION 11. Written Consent by Directors. Any action required or
permitted to be taken at any meeting of the Board of Directors may be taken
without a meeting, if a consent to such action is given in writing or by
electronic transmission by each director and is filed with the minutes of
proceedings of the Board of Directors.

         SECTION 12. Vacancies. If for any reason any or all the directors cease
to be directors, such event shall not terminate the Corporation or affect these
Bylaws or the powers of the remaining directors hereunder, if any. Pursuant to
the Corporation's election in Article V of the charter, except as may be
provided by the Board of Directors in setting the terms of any class or series
of preferred stock, (a) any vacancy on the Board of Directors may be filled only
by a majority of the remaining directors, even if the remaining directors do not
constitute a quorum and (b) any director elected to fill a vacancy shall serve
for the remainder of the full term of the class in which the vacancy occurred
and until a successor is elected and qualifies.

         SECTION 13. Compensation. Directors shall not receive any stated salary
for their services as directors but, by resolution of the Board of Directors,
may receive compensation per year and/or per meeting by the Corporation and for
any service or activity they performed or engaged in as directors. Directors may
be reimbursed for expenses of attendance, if any, at each annual, regular or
special meeting of the Board of Directors or of any committee thereof and for
their expenses, if any, in connection with each property visit and any other
service or activity they performed or engaged in as directors; but nothing
herein contained shall be construed to preclude any directors from serving the
Corporation in any other capacity and receiving compensation therefor.


                                      -12-



         SECTION 14. Loss of Deposits. No director shall be liable for any loss
which may occur by reason of the failure of the bank, trust company, savings and
loan association, or other institution with whom moneys or stock have been
deposited.

         SECTION 15. Surety Bonds. Unless required by law, no director shall be
obligated to give any bond or surety or other security for the performance of
any of his or her duties.

         SECTION 16. Reliance. Each director, officer, employee and agent of the
Corporation shall, in the performance of his or her duties with respect to the
Corporation, be fully justified and protected with regard to any act or failure
to act in reliance in good faith upon the books of account or other records of
the Corporation, upon an opinion of counsel or upon reports made to the
Corporation by any of its officers or employees or by the adviser, accountants,
appraisers or other experts or consultants selected by the Board of Directors or
officers of the Corporation, regardless of whether such counsel or expert may
also be a director.

                                   ARTICLE IV
                                   COMMITTEES

         SECTION 1. Number, Tenure and Qualifications. The Board of Directors
may appoint from among its members an Executive Committee, an Audit Committee, a
Nominating Committee and other committees, composed of one or more directors, to
serve at the pleasure of the Board of Directors. Any director may give notice to
the Board of Directors at any time of his or her resignation from any committee
on which he or she serves.

         SECTION 2. Powers. The Board of Directors may delegate to committees
appointed under Section 1 of this Article any of the powers of the Board of
Directors, except as prohibited by law.

         SECTION 3. Meetings. Notice of committee meetings shall be given in the
same manner as notice for special meetings of the Board of Directors. A majority
of the members of the committee shall constitute a quorum for the transaction of
business at any meeting of the committee. The act of a majority of the committee
members present at a meeting shall be the act of such committee. The Board of
Directors may designate a chairman of any committee, and such chairman or, in
the absence of a chairman, any two members of any committee (if there are at
least two members of the Committee) may fix the time and place of its meeting
unless the Board shall otherwise provide. In the absence of any member of any
such committee, the members thereof present at any meeting, whether or not they
constitute a quorum, may appoint another director to act in the place of such
absent member. Each committee shall keep minutes of its proceedings.

         SECTION 4. Telephone Meetings. Members of a committee of the Board of
Directors may participate in a meeting by means of a conference telephone or
similar communications equipment if all persons participating in the meeting can
hear each other at the same time. Participation in a meeting by these means
shall constitute presence in person at the meeting.


                                      -13-



         SECTION 5. Written Consent by Committees. Any action required or
permitted to be taken at any meeting of a committee of the Board of Directors
may be taken without a meeting, if a consent to such action in writing or by
electronic transmission is given by each member of the committee and filed with
the minutes of proceedings of such committee.

         SECTION 6. Vacancies. Subject to the provisions hereof, the Board of
Directors shall have the power at any time to change the membership of any
committee, to fill all vacancies, to designate alternate members to replace any
absent or disqualified member or to dissolve any such committee. Subject to the
power of the Board of Directors, the members of a committee shall have the power
to fill any vacancies on such committee.



                                    ARTICLE V
                       CHAIRMAN OF THE BOARD OF DIRECTORS
                                  AND OFFICERS

         SECTION 1. General Provisions. The officers of the Corporation shall
include a president, a secretary and a treasurer and may include a chief
executive officer, one or more vice presidents, a chief operating officer, a
chief financial officer, one or more assistant secretaries and one or more
assistant treasurers. In addition, the Board of Directors may from time to time
elect such other officers with such powers and duties as it shall deem necessary
or desirable. The officers of the Corporation shall be elected annually by the
Board of Directors, except that the chief executive officer or president may
from time to time appoint one or more vice presidents, assistant secretaries,
assistant treasurers or other officers. Each officer shall hold office until his
or her successor is elected and qualifies or until his or her death, or his or
her resignation or removal in the manner hereinafter provided. Any two or more
offices except president and vice president may be held by the same person.
Election of an officer or agent shall not of itself create contract rights
between the Corporation and such officer or agent.

         SECTION 2. Removal and Resignation. Any officer or agent of the
Corporation may be removed, with or without cause, by the Board of Directors if
in its judgment the best interests of the Corporation would be served thereby,
but such removal shall be without prejudice to the contract rights, if any, of
the person so removed. Any officer of the Corporation may resign at any time by
giving written notice of his or her resignation to the Board of Directors, the
chairman of the board, the president or the secretary. Any resignation shall
take effect immediately upon its receipt or at such later time specified in the
notice of resignation. The acceptance of a resignation shall not be necessary to
make it effective unless otherwise stated in the resignation. Such resignation
shall be without prejudice to the contract rights, if any, of the Corporation.

         SECTION 3. Vacancies. A vacancy in any office may be filled by the
Board of Directors for the balance of the term.


                                      -14-



         SECTION 4. Chairman of the Board of Directors. The Board of Directors
shall designate a chairman of the Board of Directors, who shall not, solely by
reason of such designation, be an officer of the Corporation. The chairman shall
preside at all meetings of the stockholders and of the Board of the Directors at
which he or she is present. The chairman shall have such other duties and powers
as may be determined by the Board of Directors from time to time.

         SECTION 5. Chief Executive Officer. The Board of Directors may
designate a chief executive officer. The chief executive officer shall have
general responsibility for implementation of the policies of the Corporation, as
determined by the Board of Directors, and for the management of the business and
affairs of the Corporation. He or she may execute any deed, mortgage, bond,
contract or other instrument in the name of the Corporation, except in cases
where the execution thereof shall be expressly delegated by the Board of
Directors or by these Bylaws to some other officer or agent of the Corporation
or shall be required by law to be otherwise executed; and in general shall
perform all duties incident to the office of chief executive officer and such
other duties as may be prescribed by the Board of Directors from time to time.

         SECTION 6. Chief Operating Officer. The Board of Directors may
designate a chief operating officer. The chief operating officer shall have the
responsibilities and duties as set forth by the Board of Directors or the chief
executive officer.

         SECTION 7. Chief Financial Officer. The Board of Directors may
designate a chief financial officer. The chief financial officer shall have the
responsibilities and duties as set forth by the Board of Directors or the chief
executive officer.

         SECTION 8. President. In the absence of the designation of a chief
executive officer by the Board of Directors, the president shall be the chief
executive officer. He or she may execute any deed, mortgage, bond, contract or
other instrument, except in cases where the execution thereof shall be expressly
delegated by the Board of Directors or by these Bylaws to some other officer or
agent of the Corporation or shall be required by law to be otherwise executed;
and in general shall perform all duties incident to the office of president and
such other duties as may be prescribed by the Board of Directors from time to
time.

         SECTION 9. Vice Presidents. In the absence of the president or in the
event of a vacancy in such office, the vice president (or in the event there be
more than one vice president, the vice presidents in the order designated at the
time of their election or, in the absence of any designation, then in the order
of their election) shall perform the duties of the president and when so acting
shall have all the powers of and be subject to all the restrictions upon the
president; and shall perform such other duties as from time to time may be
assigned to such vice president by the president, the chief executive officer or
the Board of Directors. The Board of Directors may designate one or more vice
presidents as executive vice president, senior vice president or as vice
president for particular areas of responsibility.


                                      -15-



         SECTION 10. Secretary. The secretary shall (a) keep the minutes of the
proceedings of the stockholders, the Board of Directors and committees of the
Board of Directors in one or more books provided for that purpose; (b) see that
all notices are duly given in accordance with the provisions of these Bylaws or
as required by law; (c) be custodian of the corporate records and of the seal of
the Corporation; (d) keep a register of the post office address of each
stockholder, which shall be furnished to the secretary by such stockholder; (e)
have general charge of the stock transfer books of the Corporation; and (f) in
general perform such other duties as from time to time may be assigned to him or
her by the chief executive officer, the president or by the Board of Directors.

         SECTION 11. Treasurer. The treasurer shall keep full and accurate
accounts of receipts and disbursements in books belonging to the Corporation and
shall deposit all moneys and other valuable effects in the name and to the
credit of the Corporation in such depositories as may be designated by the Board
of Directors. In the absence of a designation of a chief financial officer by
the Board of Directors, the treasurer shall be the chief financial officer of
the Corporation.

                  The treasurer shall disburse the funds of the Corporation as
may be ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the president and Board of Directors, at the
regular meetings of the Board of Directors or whenever it may so require, an
account of all his or her transactions as treasurer and of the financial
condition of the Corporation.

                  If required by the Board of Directors, the treasurer shall
give the Corporation a bond in such sum and with such surety or sureties as
shall be satisfactory to the Board of Directors for the faithful performance of
the duties of his or her office and for the restoration to the Corporation, in
case of his or her death, resignation, retirement or removal from office, of all
books, papers, vouchers, moneys and other property of whatever kind in his or
her possession or under his or her control belonging to the Corporation.

         SECTION 12. Assistant Secretaries and Assistant Treasurers. The
assistant secretaries and assistant treasurers, in general, shall perform such
duties as shall be assigned to them by the secretary or treasurer, respectively,
or by the president or the Board of Directors. The assistant treasurers shall,
if required by the Board of Directors, give bonds for the faithful performance
of their duties in such sums and with such surety or sureties as shall be
satisfactory to the Board of Directors.

         SECTION 13. Salaries. The salaries and other compensation of the
officers shall be fixed from time to time by the Board of Directors and no
officer shall be prevented from receiving such salary or other compensation by
reason of the fact that he or she is also a director.


                                      -16-



                                   ARTICLE VI
                      CONTRACTS, LOANS, CHECKS AND DEPOSITS

         SECTION 1. Contracts. The Board of Directors, the Executive Committee
or another committee of the Board of Directors within the scope of its delegated
authority, may authorize any officer or agent to enter into any contract or to
execute and deliver any instrument in the name of and on behalf of the
Corporation and such authority may be general or confined to specific instances.
Any agreement, deed, mortgage, lease or other document shall be valid and
binding upon the Corporation when authorized or ratified by action of the Board
of Directors or the Executive Committee or such other committee and executed by
an authorized person.

         SECTION 2. Checks and Drafts. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the Corporation shall be signed by such officer or agent of the
Corporation in such manner as shall from time to time be determined by the Board
of Directors.

         SECTION 3. Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies or other depositories as the Board of Directors
may designate.

                                   ARTICLE VII
                                      STOCK

         SECTION 1. Certificates. Except as may be otherwise provided by the
Board of Directors, stockholders of the Corporation are not entitled to
certificates representing the shares of stock held by them. In the event that
the Corporation issues shares of stock represented by certificates, such
certificates shall be signed by the officers of the Corporation in the manner
permitted by the MGCL and contain the statements and information required by the
MGCL. In the event that the Corporation issues shares of stock without
certificates, to the extent required by the MGCL, the Corporation shall provide
to record holders of such shares a written statement of the information required
by the MGCL to be included on stock certificates.

         SECTION 2. Holders of Record. The Corporation shall be entitled to
treat the holder of record of any share of stock as the holder in fact thereof
and, accordingly, shall not be bound to recognize any equitable or other claim
to or interest in such share or on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise provided by
the laws of the State of Maryland.

         SECTION 3. Replacement Certificate. Subject to Section 1 hereof, the
president, treasurer, secretary or any other officer designated by the Board of
Directors may direct a new certificate to be issued in place of any certificate
previously issued by the Corporation alleged to have been lost, stolen or
destroyed upon the making of an affidavit of that fact by the person claiming
the certificate to be lost, stolen or destroyed. When authorizing the issuance
of a new certificate, an officer designated by the Board of Directors may, in
his or her discretion and as a


                                      -17-



condition precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed certificate or the owner's legal representative to advertise
the same in such manner as he or she shall require and/or to give bond, with
sufficient surety, to the Corporation to indemnify it against any loss or claim
which may arise as a result of the issuance of a new certificate.

         SECTION 4. Closing of Transfer Books or Fixing of Record Date. The
Board of Directors may set, in advance, a record date for the purpose of
determining stockholders entitled to notice of or to vote at any meeting of
stockholders or determining stockholders entitled to receive payment of any
dividend or the allotment of any other rights, or in order to make a
determination of stockholders for any other proper purpose. Such date, in any
case, shall not be prior to the close of business on the day the record date is
fixed and shall be not more than 90 days and, in the case of a meeting of
stockholders, not less than ten days, before the date on which the meeting or
particular action requiring such determination of stockholders of record is to
be held or taken.

         In lieu of fixing a record date, the Board of Directors may provide
that the stock transfer books shall be closed for a stated period but not longer
than 20 days. If the stock transfer books are closed for the purpose of
determining stockholders entitled to notice of or to vote at a meeting of
stockholders, such books shall be closed for at least ten days before the date
of such meeting.

         If no record date is fixed and the stock transfer books are not closed
for the determination of stockholders, (a) the record date for the determination
of stockholders entitled to notice of or to vote at a meeting of stockholders
shall be at the close of business on the day on which the notice of meeting is
mailed or the 30th day before the meeting, whichever is the closer date to the
meeting; and (b) the record date for the determination of stockholders entitled
to receive payment of a dividend or an allotment of any other rights shall be
the close of business on the day on which the resolution of the directors,
declaring the dividend or allotment of rights, is adopted.

         When a determination of stockholders entitled to vote at any meeting of
stockholders has been made as provided in this section, such determination shall
apply to any adjournment thereof, except when (i) the determination has been
made through the closing of the transfer books and the stated period of closing
has expired, or (ii) the meeting is adjourned to a date more than 120 days after
the record date fixed for the original meeting, in either of which case a new
record date shall be determined as set forth herein.

         SECTION 5. Stock Ledger. The Corporation shall maintain at its
principal office or at the office of its counsel, accountants or transfer agent,
an original or duplicate share ledger containing the name and address of each
stockholder and the number of shares of each class held by such stockholder.

         SECTION 6. Fractional Stock; Issuance of Units. The Board of Directors
may issue fractional stock or provide for the issuance of scrip, all on such
terms and under such conditions


                                      -18-



as they may determine. Notwithstanding any other provision of the charter or
these Bylaws, the Board of Directors may issue units consisting of different
securities of the Corporation. Any security issued in a unit shall have the same
characteristics as any identical securities issued by the Corporation, except
that the Board of Directors may provide that for a specified period securities
of the Corporation issued in such unit may be transferred on the books of the
Corporation only in such unit.

                                  ARTICLE VIII
                                 ACCOUNTING YEAR

         The Board of Directors shall have the power, from time to time, to fix
the fiscal year of the Corporation by a duly adopted resolution.

                                   ARTICLE IX
                                  DISTRIBUTIONS

         SECTION 1. Authorization. Dividends and other distributions upon the
stock of the Corporation may be authorized by the Board of Directors, subject to
the provisions of law and the charter of the Corporation. Dividends and other
distributions may be paid in cash, property or stock of the Corporation, subject
to the provisions of law and the charter.

         SECTION 2. Contingencies. Before payment of any dividends or other
distributions, there may be set aside out of any assets of the Corporation
available for dividends or other distributions such sum or sums as the Board of
Directors may from time to time, in its absolute discretion, think proper as a
reserve fund for contingencies, for equalizing dividends or other distributions,
for repairing or maintaining any property of the Corporation or for such other
purpose as the Board of Directors shall determine to be in the best interest of
the Corporation, and the Board of Directors may modify or abolish any such
reserve.

                                    ARTICLE X
                                      SEAL

         SECTION 1. Seal. The Board of Directors may authorize the adoption of a
seal by the Corporation. The seal shall contain the name of the Corporation and
the year of its incorporation and the words "Incorporated Maryland." The Board
of Directors may authorize one or more duplicate seals and provide for the
custody thereof.

         SECTION 2. Affixing Seal. Whenever the Corporation is permitted or
required to affix its seal to a document, it shall be sufficient to meet the
requirements of any law, rule or regulation relating to a seal to place the word
"(SEAL)" adjacent to the signature of the person authorized to execute the
document on behalf of the Corporation.

                                   ARTICLE XI
                     INDEMNIFICATION AND ADVANCE OF EXPENSES


                                      -19-



         To the maximum extent permitted by Maryland law, in effect from time to
time, the Corporation shall indemnify and, without requiring a preliminary
determination of the ultimate entitlement to indemnification, shall pay or
reimburse reasonable expenses in advance of final disposition of a proceeding to
(a) any individual who is a present or former director or officer of the
Corporation and who is made, or threatened to be made, a party to the proceeding
by reason of his or her service in any such capacity or (b) any individual who,
while a director or officer of the Corporation and at the request of the
Corporation, serves or has served as a director, officer, partner or trustee of
such corporation, real estate investment trust, partnership, joint venture,
trust, employee benefit plan or other enterprise and who is made, or threatened
to be made, a party to the proceeding by reason of his or her service in any
such capacity. The Corporation may, with the approval of its Board of Directors
or any duly authorized committee thereof, provide such indemnification and
advance for expenses to a person who served a predecessor of the Corporation in
any of the capacities described in (a) or (b) above and to any employee or agent
of the Corporation or a predecessor of the Corporation. Any indemnification or
advance of expenses made pursuant to this Article shall be subject to applicable
requirements of the 1940 Act. The indemnification and payment of expenses
provided in these Bylaws shall not be deemed exclusive of or limit in any way
other rights to which any person seeking indemnification or payment of expenses
may be or may become entitled under any bylaw, regulation, insurance, agreement
or otherwise.

         Neither the amendment nor repeal of this Article, nor the adoption or
amendment of any other provision of the Bylaws or charter of the Corporation
inconsistent with this Article, shall apply to or affect in any respect the
applicability of the preceding paragraph with respect to any act or failure to
act which occurred prior to such amendment, repeal or adoption.

                                   ARTICLE XII
                                WAIVER OF NOTICE

         Whenever any notice is required to be given pursuant to the charter of
the Corporation or these Bylaws or pursuant to applicable law, a waiver thereof
in writing, signed by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be deemed equivalent to the
giving of such notice. Neither the business to be transacted at, nor the purpose
of, any meeting need be set forth in the waiver of notice, unless specifically
required by statute. The attendance of any person at any meeting shall
constitute a waiver of notice of such meeting, except where such person attends
a meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting is not lawfully called or convened.

                                  ARTICLE XIII
                              INSPECTION OF RECORDS

         A stockholder that is otherwise eligible under applicable law to
inspect the Corporation's books of account, stock ledger, or other specified
documents of the Corporation shall have no


                                      -20-



right to make such inspection if the Board of Directors determines that such
stockholder has an improper purpose for requesting such inspection.

                                   ARTICLE XV
                               AMENDMENT OF BYLAWS

         The Board of Directors shall have the exclusive power, at any time, to
adopt, alter or repeal any provision of these Bylaws and to make new Bylaws.


                                      -21-




                                                                  Exhibit (d)(1)


                          INVESTMENT ADVISORY AGREEMENT

         AGREEMENT, made as of this 24th day of July, 2007, between XShares
Advisors LLC (the "Advisor"), a Delaware limited liability company with a
principal place of business at 420 Lexington Avenue, New York, NY 10170, and
TDAX Funds, Inc., a Maryland corporation (the "Company") with a principal place
of business at 420 Lexington Avenue, New York, NY 10170.

         WHEREAS, the Advisor is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act");

         WHEREAS, the Company is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act")
and is authorized to issue shares in one or more series; and

         WHEREAS, the Company desires to retain the Advisor to serve as
investment adviser to each of the Funds listed on Schedule A hereto, as such
Schedule A may be amended or supplemented from time to time by mutual agreement
(each, a "Fund" and collectively the "Funds") and the Advisor is willing to
perform these services on the terms and conditions set forth in this Agreement.

         NOW THEREFORE, the parties hereto hereby agree as follows:

         1. The Company and Funds

         The Company is engaged in the business of investing and reinvesting its
assets in securities of the type and in accordance with the limitations
specified in its Articles of Incorporation, By-Laws and Registration Statement
filed with the Securities and Exchange Commission (the "Commission") under the
1940 Act and the Securities Act of 1933 (the "Securities Act"), including the
prospectuses forming a part thereof and statements of additional information
relating to the Funds contained therein, and as may be supplemented from time to
time, all in such manner and to such extent as may from time to time be
authorized by the Board of Directors of the Company (the "Board"). The Board is
authorized to approve the issuance by the Company of unissued shares in any
number of additional classes or series. The Company has delivered copies of the
documents listed in this Section to the Advisor and will from time to time
furnish the Advisor with any amendments thereof.

         2. Appointment of the Advisor

         The Company hereby appoints the Advisor, subject to the direction and
control of the Board, to manage the investment and reinvestment of the assets in
the Funds and, without limiting the generality of the foregoing, to provide the
other services specified in Section 3 hereof.

         The Advisor shall be deemed to be an independent contractor and shall,
unless otherwise expressly provided for or authorized in this Agreement or
another writing by the Company and




the Advisor, have no authority to act for or represent the Company in any way or
otherwise be deemed an agent of the Company.

         3. Duties and Obligations of the Advisor

            (a) The Advisor will manage the investment operations and
composition of each Fund and render investment advice for each Fund. The Advisor
shall make decisions with respect to all purchases and sales of securities and
other investment assets of the Funds. The services provided by the Advisor shall
include: (i) furnishing continuously an investment program for each Fund; (ii)
managing the investment and reinvestment of each Fund's assets; (iii)
determining which investments shall be purchased, held, sold or exchanged for
each Fund and what portion, if any, of the assets of each Fund shall be held
uninvested; (iv) making changes on behalf of the Company in the investments for
each Fund; (v) vote proxies for the Company, file ownership reports under
Section 13 of the Securities Exchange Act of 1934 (the "1934 Act") and take
other actions on behalf of the Funds as a shareholder of the underlying
securities contained in the Funds' portfolios and (vi) rendering reports to the
Company's officers and the Board concerning the Advisor's discharge of the
foregoing responsibilities. To carry out such duties and responsibilities, the
Advisor is hereby authorized, as agent and attorney-in-fact for the Company, for
the account of, at the risk of and in the name of the Funds, to place orders and
issue instructions for the Funds. In all purchases, sales and other transactions
in securities for the Funds, the Advisor is authorized to exercise full
discretion and act for the Funds in the same manner and with the same force and
effect as the Funds might or could do with respect to such purchases, sales or
other transactions, as well as with respect to all other things necessary or
incidental to the furtherance or conduct of such purchases, sales or other
transactions.

            (b) The Advisor will report to the Board at each regular meeting
thereof all material changes in the investments in the Funds since the prior
report, and will also keep the Board informed of important developments
affecting the Company, the Funds and the Advisor, and on its own initiative will
furnish the Board from time to time with such information as the Advisor may
believe appropriate, whether concerning the individual companies whose
securities are held by the Funds, the industries in which they engage, or the
economic, social or political conditions prevailing in each country in which the
Funds maintain investments. The Advisor will also furnish the Board with such
statistical and analytical information with respect to securities in the Funds
as the Advisor may believe appropriate or as the Board reasonably may request.
The Advisor shall discharge all of its duties and responsibilities under this
Agreement subject to the supervision and control of the Board and will comply
with the policies established from time to time by the Board as well as the
limitations imposed by the Company's Articles of Incorporation, By-Laws and
Registration Statement under the 1940 Act and the Securities Act, the
limitations in the 1940 Act and in the Internal Revenue Code of 1986, as
amended, the Company's compliance manual, the investment objectives, policies
and restrictions of the Funds, and applicable laws and regulations.

            (c) The Advisor will from time to time employ or associate with such
persons as the Advisor believes to be appropriate or necessary to assist in the
execution of the Advisor's duties hereunder; provided, however, that the
employment of or sub-contracting with any such person shall not relieve the
Advisor of its responsibilities or liabilities hereunder; and provided further
that the Advisor shall not have the authority to subcontract advisory
responsibilities


                                       2



without the consent of the Company. The cost of performance of such duties shall
be borne and paid by the Advisor.

            (d) The Advisor shall maintain, or cause to be maintained records
relating to portfolio transactions and the placing and allocation of brokerage
orders as are required to be maintained by the Funds under the 1940 Act. The
Advisor shall prepare and maintain, or cause to be prepared and maintained, in
such form, for such periods and in such locations as may be required by
applicable law, all documents and records relating to the services provided by
the Advisor pursuant to this Agreement required to be prepared and maintained by
the Funds. The books and records pertaining to the Funds that are in the
possession of the Advisor shall be the property of the Company. The Company, or
the Company's authorized representatives, shall have access to such books and
records at all times during the Advisor's normal business hours. Upon the
reasonable request of the Company, copies of any such books and records shall be
provided promptly by the Advisor to the Company or the Company's authorized
representatives.

            (e) The Advisor will provide, or arrange for the provision of,
transfer agency, custody, fund administration and accounting and all other
non-distribution related services necessary for the Funds' operation, subject in
each case to the approval of the Board. The Advisor will also provide
supervisory personnel who will be responsible for supervising and monitoring the
performance of the Company's service providers in connection with their duties.
Such personnel may be employees of the Advisor or employees of affiliates of the
Advisor or of other organizations. The Advisor will also administer the
Company's business affairs, provides office facilities and equipment and certain
clerical, bookkeeping and administrative services and will permit its officers
and employees to serve without compensation as officers, directors or employees
of the Company.

         4. Delegation of Responsibilities

         The Advisor may carry out any of its obligations or responsibilities
under this Agreement by engaging, subject to supervision by the Advisor, one or
more Sub-Advisors who are registered as investment advisers pursuant to the
Advisers Act ("Sub-Advisor"). Each Sub-Advisor's engagement will be evidenced by
a separate written agreement approved by the Board and, if required under the
1940 Act, by the shareholders of the Funds (unless the Commission or its staff
has given authorization or issued an interpretation or no-action letter
dispensing with the requirement of shareholder approval). The Advisor shall not
be liable hereunder for any act or omission of any Sub-Advisor, except for
failure to exercise good faith in the engagement of the Sub-Advisor and for
failure to exercise appropriate supervision of such Sub-Advisor, and as may
otherwise be agreed in writing. The Advisor shall be solely responsible for
compensating any Sub-Advisor for services rendered under any sub-advisory
agreement. The Advisor may, from time to time and at any time, terminate any
Sub-Advisor and reassume the responsibilities assigned to such Sub-Advisor with
respect to the Funds or engage another Sub-Advisor without obtaining the
approval of the shareholders of the Funds unless required by the federal
securities laws.


                                       3



         5. Broker -Dealer Relationships

         In connection with the purchase and sale of securities for the Funds,
the Advisor is responsible for broker-dealer selection and negotiation of
brokerage commission rates. The Advisor's primary consideration in effecting a
security transaction will be to obtain best price and execution. In selecting a
broker-dealer to execute each particular transaction for the Funds the Advisor
may take in consideration various factors including, but not limited to: the
best price available; the reliability, integrity and financial condition of the
broker-dealer; and the size and the difficulty in executing the order.
Accordingly, the price to the Funds in any transaction may be less favorable
than that available from another broker-dealer if the difference is reasonably
justified by other aspects of the portfolio execution services offered. Subject
to such policies as the Board may from time to time determine, the Advisor shall
not be deemed to have acted unlawfully or to have breached any duty created by
this Agreement or otherwise solely by reason of having caused the Funds to pay a
broker or dealer that provides brokerage and research services to the Advisor an
amount of commission for effecting a 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 was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of either that
particular transaction or the overall responsibilities of the Advisor with
respect to the Funds and to other clients of the Advisor. The Advisor may
delegate any of its duties and responsibilities as to the selection of
broker-dealers to any Sub-Advisor appointed in accordance with the provisions of
Section 4 of this Agreement.

         6. Advisory Fees/Allocation of Expenses

            (a) For the services to be provided by the Advisor hereunder with
respect to each Fund, the Company shall pay to the Advisor a unitary advisory
fee at the rate set forth on Schedule A attached hereto. Schedule A shall be
amended from time to time to reflect the addition and/or termination of any Fund
as a Fund hereunder and to reflect any change in the advisory fees payable with
respect to any Fund duly approved in accordance with Section 12(b) hereunder.
All fees payable hereunder shall be accrued daily and paid as soon as practical
after the last day of each month.

            In any case of commencement or termination of this Agreement with
respect to any Fund during any calendar month, the fee with respect to such Fund
for that month shall be reduced proportionately based upon the number of
calendar days during which it is in effect, and the fee shall be computed upon
the average daily net assets of such Fund for the days during which it is in
effect.

            (b) The Advisor shall pay its own expenses in connection with the
services to be provided by it pursuant to this Agreement. In addition, the
Advisor shall be responsible for the compensation of officers or employees of
the Company who are also officers or employees of the Advisor, except as may
otherwise be determined by the Board. The Advisor agrees to pay all fees and
expenses of any Sub-Advisor, and shall pay, or cause a Sub-Advisor to pay, all
fees and expenses of any other Sub-Advisor, the Transfer-Agent, the
Administrator and Accounting Agent, and the Custodian engaged by the Advisor on
behalf of the Company. The Company is responsible for the payment of all other
expenses associated with its operation including, but not


                                       4



limited to, (i) brokerage and other expenses (such as stamp taxes) connected
with the execution of portfolio transactions or in connection with creation and
redemption transactions, (ii) taxes, (iii) interest on borrowings, (iv) legal
fees or expenses in connection with any arbitration, litigation or pending or
threatened arbitration or litigation, including any settlements in connection
therewith, (v) compensation and expenses of the Directors of the Company who are
not officers, directors, partners or employees of the Advisor, and Sub-Advisor,
or their affiliates (the "Independent Directors") as well as the cost of
Directors' Meetings, (vi) compensation and expenses of counsel to the Fund and
counsel to the Independent Directors, (vii) if approved by the Board,
compensation and expenses of the Company's chief compliance officer and expenses
associated with the Company's compliance program, (viii) fees and expenses of
the Company's independent auditors, (ix) registration fees, expenses associated
with compliance by the Fund with mandatory regulatory mandates including those
relating to the development and distribution of its prospectus and shareholder
reports, and extraordinary expenses, (x) distribution fees and expenses paid by
the Company under any distribution plan adopted pursuant to Rule 12b-l under the
1940 Act, (xi) the cost of director and officer errors and omissions insurance
coverage, (xii) the Funds' pro-rata portion of dues, fees and charges of any
trade associations of which the Company is a member, (xiii) certain
out-of-pocket expenses, including, but not limited to cost of obtaining prices
for security valuations (including manual broker quotes), Federal Reserve
charges related to securities transactions, postage and insurance on physical
transfer items, telecommunication charges, and proxy voting execution, advice
and reporting etc. and (xiv) the advisory fee payable to the Advisor hereunder.
The payment or assumption by the Advisor of any expense of the Company that the
Advisor is not required by this Agreement to pay or assume shall not obligate
the Advisor to pay or assume the same or any similar expense of the Company on
any subsequent occasion.

         7. Limitation of Liability Under the Company's Articles of
Incorporation

         The Advisor acknowledges and agrees that, with respect to any potential
claim it may have against officers or directors of the Company relating to the
subject matter of this Agreement, such claim is subject to the limitation
contained in the Company's Articles of Incorporation relating to the liability
of directors and officers of the Company to its stockholders for money damages.

         8. Provision of Certain Information by the Advisor

         The Advisor will promptly notify the Company in writing of the
occurrence of any of the following events:

            (a) the Advisor fails to be registered as an investment adviser
under the Advisors Act or under the laws of any jurisdiction in which the
Advisor is required to be registered as an investment adviser in order to
perform its obligations under this Agreement;

            (b) the Advisor is served or otherwise receives notice of any
action, suit, proceeding, inquiry or investigation, at law or in equity, before
or by any court, governmental, regulatory or administrative authority or body,
or any self-regulatory body public board or body, involving the affairs of the
Advisor or the Company;


                                       5



            (c) it becomes ineligible to serve as an investment advisor to the
Company, or any of its employees, officers or directors become ineligible to act
in such capacity, pursuant to Section 9 of the 1940 Act, or other applicable law
or regulation, and

            (d) the parent company of the Advisor or the portfolio manager of
any Fund changes or the Advisor otherwise is subject to a change in corporate
ownership that may constitute a "change of control" under the Advisers Act or
the 1940 Act.

         9. Limitation of Liability of the Advisor

         Neither the Advisor nor its officers, directors, employees, agents,
affiliated persons or controlling persons or their respective assigns shall be
liable for any error of judgment or mistake of law or for any loss suffered by
the Company, the Funds or its shareholders in connection with the matters to
which this Agreement relates; provided that no provision of this Agreement shall
be deemed to protect the Advisor against any liability to the Company, the Funds
or its shareholders resulting from any willful misfeasance, bad faith or gross
negligence in the performance of its duties or obligations hereunder, the
reckless disregard of its duties or obligations hereunder, or breach of its
fiduciary duty to the Company, any Fund or its shareholders.

         10. Force Majeure

         Notwithstanding any other provision of this Agreement, the Advisor
shall not be liable for any loss suffered by the Company, the Funds or its
shareholders caused directly or indirectly by circumstances beyond the Advisor's
reasonable control including, without limitation, government restrictions,
exchange or market rulings, suspensions of trading, acts of civil or military
authority, national emergencies, labor difficulties, fires, earthquakes, floods
or other catastrophes, acts of God, wars, riots, acts of terrorism or failures
of communication or power supply. In the event of equipment breakdowns beyond
its reasonable control, the Advisor shall take reasonable steps to minimize
service interruptions, but shall have no liability with respect thereto.

         11. Confidentiality

         The Advisor will treat confidentially and as proprietary information of
the Company all records and other information relative to the Funds and prior,
present or potential shareholders, including Nonpublic Personal Information, as
defined in Regulation S-P under the Gramm-Leach- Bliley Act (the "G-L-B Act"),
and will not use such records and information for any purpose other than
performance of its responsibilities and duties hereunder, except after prior
notification to and approval in writing by the Company, which approval shall not
be unreasonably withheld and may not be withheld where the Advisor may be
exposed to civil or criminal contempt proceedings for failure to comply, when
requested to divulge such information by duly constituted authorities, or when
so requested by the Company or when otherwise permitted by the G-L-B Act.
Nothing contained herein, however, shall prohibit the Advisor from advertising
or soliciting the public generally with respect to other products or services,
regardless of whether such advertisement or solicitation may include prior,
present or potential shareholders of the Company.


                                       6



         12. Duration, Amendment and Termination

            (a) Duration. This Agreement shall become effective with respect to
each Fund on the date hereof and, with respect to any Fund added to this
Agreement subsequent to the date hereof, on the date Schedule A is amended to
reflect such additional Fund in accordance with paragraph (b) below. Unless
terminated in accordance with this Section 12, the Agreement shall remain in
full force and effect for two years from the date hereof with respect to each
Fund and, with respect to each Fund added to this Agreement subsequent to the
date hereof, for two years from the date on which such Fund becomes a Fund
hereunder. Subsequent to such initial periods of effectiveness, this Agreement
shall continue in full force and effect for additional annual terms so long as
such continuance with respect to such Fund is specifically approved at least
annually (i) by either the Board or by vote of a "majority of the outstanding
voting securities" (as defined in the 1940 Act) of such Fund, and (ii) in either
event, by the vote of a majority of the directors who are not parties to this
Agreement or "interested persons" (as defined in the 1940 Act) of any such party
("Independent Directors") cast in person at a meeting called for the purpose of
voting on such approval. If the shareholders of any Fund fail to approve the
Agreement or any continuance of the Agreement as provided herein, the Advisor
may continue to serve hereunder in the manner and to the extent permitted by the
1940 Act and rules and regulations thereunder. The foregoing requirement that
continuance of this Agreement be "specifically approved at least annually" shall
be construed in a manner consistent with the 1940 Act and the rules and
regulations thereunder.

            (b) Amendment. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought. If shareholder approval of an amendment is required
under the 1940 Act, no such amendment shall become effective until approved by a
vote of the majority of the outstanding shares of the affected Funds. Otherwise,
a written amendment of this Agreement is effective upon the approval of the
Board and the Advisor.

            (c) Termination. As required under the 1940 Act, this Agreement may
be terminated as to any Fund at any time, without the payment of any penalty, by
the Company (by vote of the Board or by vote of a majority of the outstanding
voting securities of the particular Fund), or by the Advisor on sixty (60) days'
written notice. The notice provided for herein may be waived by the party
entitled to receipt thereof. This Agreement will immediately terminate in the
event of its assignment. This Agreement may also be terminated immediately by
the Company or the Advisor in the event that the other party (i) breaches a
material term of this Agreement or (ii) commits a material violation of any
governing law. As used in this Agreement, the terms "majority of the outstanding
voting securities," "interested persons" and "assignment" shall have the same
meanings as such terms have in the 1940 Act.

         13. Services Not Exclusive

         The services of the Advisor to the Company hereunder are not to be
deemed exclusive, and the Advisor shall be free to render similar services to
others (including other investment companies and to engage in other activities)
so long as its services hereunder are not impaired thereby. It is understood and
agreed that officers or directors of the Advisor may serve as


                                       7



officers or directors of the Company and that officers or directors of the
Company may serve as officers or directors of the Advisor, to the extent that
such services may be permitted by law, and that the officers and directors of
the Advisor are not prohibited from engaging in any other business activity or
from rendering services to any other person, or from serving as partners,
officers, directors or trustees on any other firm or trust, including other
investment advisory companies.

         14. Indemnification by the Advisor.

         The Company shall not be responsible for, and the Advisor shall
indemnify and hold the Company, the Funds and its directors, officers and agents
harmless from and against, any and all losses, damages, costs, charges, counsel
fees, payments, expenses and liability arising out of or attributable to the
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties on the part of the Advisor or any of its officers,
directors, employees or agents.

         15. Indemnification by the Fund.

         In the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of duties hereunder on the part of the Advisor or any of its
officers, directors, employees or agents, the Company hereby agrees to indemnify
and hold harmless the Advisor, its parent, affiliates and their respective
officers, directors, employees and agents and controlling persons of each of
them against any loss, liability, claim, damage or expense (including reasonable
attorney's fees and the reasonable cost and expense of investigating and
defending any alleged loss, liability, claim, damage or expense) and whether
such actions, suits or proceedings are brought at law or in equity or whether
brought by a private party or a governmental entity, bureau, agency or
instrumentality, of any kind, arising from (i) the advertising, solicitation,
sale, purchase or pledge of securities, whether of the Company or other
securities (ii) actions undertaken by the Funds or their officers, directors,
employees or affiliates, (iii) resulting from any violations of the securities
laws, rules, regulations, statutes and codes, whether federal or of any state,
by the Company or their officers, directors, employees or affiliates, (iv)
arising out of or based upon this Agreement or by reason of its performance of
services provided hereunder or, (v) (a) arising out of or based upon any
Sub-Advisory agreement entered into by the Advisor pursuant to Section 4 hereof
or (b) by reason of the performance of the Sub-Advisor of its services pursuant
to any such Sub-Advisory agreement to the extent the Advisor has indemnified the
Sub-Advisor pursuant to the terms of such Sub-Advisory Agreement. Federal and
state securities laws impose liabilities under certain circumstances on persons
who act in good faith, and nothing herein shall constitute a waiver of
limitation of any rights which a Fund may have and which may not be waived under
any applicable federal or state securities laws.

         16. Miscellaneous

            (a) Notice. All notices required to be given pursuant to this
Agreement shall be delivered or mailed to the last known business address of the
Company or the Advisor in person or by registered mail or a private mail or
delivery service providing the sender with notice of receipt. Notice shall be
deemed given on the date delivered or mailed in accordance with this section.


                                       8



            (b) Severability. Should any portion of this Agreement for any
reason be held to be void in law or in equity, the Agreement shall be construed,
insofar as is possible, as if such portion had never been contained herein.

            (c) Applicable Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of New York (without giving effect to
its conflict of law principles) and the applicable provisions of the 1940 Act.
To the extent that the applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the 1940 Act, the
latter shall control.

            (d) Execution By Counterpart. This Agreement may be executed in any
number of counterparts, all of which together shall constitute one agreement..

            (e) Entire Agreement. This Agreement constitute the entire
understanding and agreement of the parties with respect to the subject matter
contained herein.

                           [SIGNATURE PAGE TO FOLLOW]


                                       9



         IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed as of the date first set forth above.

TDAX FUNDS, INC.


By:      /s/ David M. Kelley
         ------------------------
         Name:  David M. Kelley
         Title: President



XSHARES ADVISORS LLC


By:      /s/ Anthony F. Dudziski
         ------------------------
         Name:  Anthony F. Dudziski
         Title: Chief Operating Officer



                                       10





                                   Schedule A
                      to the Investment Advisory Agreement
                               Dated July 24, 2007
                            between TDAX Funds, Inc.
                            and XShares Advisors LLC

                                Name of Fund; Fee


--------------------------------------------------------------------------------
TDAX Independence 2010 Exchange-Traded Fund                               0.65%

--------------------------------------------------------------------------------
TDAX Independence 2020 Exchange-Traded Fund                               0.65%

--------------------------------------------------------------------------------
TDAX Independence 2030 Exchange-Traded Fund                               0.65%

--------------------------------------------------------------------------------
TDAX Independence 2040 Exchange-Traded Fund                               0.65%

--------------------------------------------------------------------------------
TDAX Independence In-Target Exchange-Traded Fund                          0.65%

--------------------------------------------------------------------------------


                                       11





                                                                  Exhibit (d)(2)

                             SUB-ADVISORY AGREEMENT


      AGREEMENT, dated as of July 24, 2007 by and between XShares Advisors LLC
(the "Investment Adviser"), a Delaware limited liability company having its
principal office and place of business at 420 Lexington Avenue, New York, NY
10170, and Amerivest Investment Management, LLC (the "Sub-Adviser"), a Delaware
limited liability company having its principal office and place of business at
1005 North Ameritrade Place, Bellevue, NE 68005 and a wholly-owned subsidiary of
TD AMERITRADE Holding Corporation, whose headquarters are located at 4211 South
102nd Street, Omaha, NE 68127.

      WHEREAS, the Investment Adviser is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended ("Advisers Act");

      WHEREAS, the Investment Adviser has entered into an Investment Advisory
Agreement dated as of July 24, 2007 with TDAX Funds, Inc. (the "Corporation") an
investment company registered under the Investment Company Act of 1940, as
amended ("Investment Company Act");

      WHEREAS, the Investment Adviser has entered into a separate Sub-Advisory
Agreement dated as of July 24, 2007 with BNY Investment Advisors ("BNY"), a
registered investment adviser under the Advisers Act;

      WHEREAS, the Sub-Adviser is registered as an investment adviser under the
Advisers Act;

      WHEREAS, the Board of Directors of the Corporation and the Investment
Adviser desire to retain the Sub-Adviser to render investment advisory and other
services to the funds specified in Appendix A hereto, as amended from time to
time, each a series of the Corporation (each a "Fund" and collectively, the
"Funds"), in the manner and on the terms hereinafter set forth;

      WHEREAS, the Investment Adviser has the authority under the Investment
Advisory Agreement, with the consent of the Board of Directors of the
Corporation (the "Board" or the "Directors") to select sub-advisers for each
Fund; and

      WHEREAS, the Sub-Adviser is willing to furnish such services to the
Investment Adviser and each Fund;

      NOW, THEREFORE, the Investment Adviser and the Sub-Adviser agree as
follows:

1. APPOINTMENT OF THE SUB-ADVISER

      The Investment Adviser hereby appoints the Sub-Adviser to act as a
sub-adviser for each Fund, subject to the supervision and oversight of the
Investment Adviser and the





Directors of the Corporation, and in accordance with the terms and conditions of
this Agreement. The Sub-Adviser will be an independent contractor and will have
no authority to act for or represent the Corporation or the Investment Adviser
in any way or otherwise be deemed an agent of the Corporation or the Investment
Adviser except as expressly authorized in this Agreement or another writing by
the Corporation, the Investment Adviser and the Sub-Adviser.

2. ACCEPTANCE OF APPOINTMENT

      The Sub-Adviser accepts that appointment and agrees to render the services
herein set forth, for the compensation herein provided.

      The assets of each Fund will be maintained in the custody of a custodian
(who shall be identified by the Investment Adviser in writing). The Sub-Adviser
will not have custody of any securities, cash or other assets of the Fund and
will not be liable for any loss resulting from any act or omission of the
custodian other than acts or omissions arising in reliance on instructions of
the Sub-Adviser.

3. SERVICES TO BE RENDERED BY THE SUB-ADVISER TO THE CORPORATION

      A. As sub-adviser to each Fund, the Sub-Adviser will consult with the
Investment Advisor on the portfolio of securities and provide oversight over
BNY, such oversight to include review of the portfolio of securities of each
Fund in accordance with the terms of the Funds' prospectuses and statements of
additional information, assistance in the resolution of any pricing issues and
assistance in the development of trading strategies. Services performed by the
Sub-Adviser are subject to the direction, supervision and control of the
Investment Adviser and the Directors of the Corporation.

      B. As part of the services it will provide hereunder, the Sub-Adviser
will:
            (i) regularly monitor the portfolio of the Fund in comparison with
      its Underlying Index and work with and supervise BNY to seek to obtain the
      tracking error of the Fund to its Underlying Index as set forth by the
      Corporation from time to time;

            (ii) coordinate with BNY to keep the Directors of the Corporation
      and the Investment Adviser fully informed on an ongoing basis of all
      material facts concerning the investment and reinvestment of the assets of
      each Fund and the operations of the Sub-Adviser and BNY, make regular and
      periodic special written reports of such additional information concerning
      the same as may reasonably be requested from time to time by the
      Investment Adviser or the Directors of the Corporation, and attend
      meetings with the Investment Adviser and/or the Directors, as reasonably
      requested, to discuss the foregoing;

            (iii) in accordance with procedures and methods established by the
      Directors of the Corporation, which may be amended from time to time, and
      in conjunction with BNY, promptly notify the Investment Adviser or the
      Directors of the Corporation of


                                       2



      securities in a Fund for which fair valuation may be required or of
      significant events that may require fair value pricing of all or a portion
      of a Fund's portfolio, provide assistance in determining the fair value of
      all securities and other investments/assets in the Fund, as necessary, and
      use reasonable efforts to arrange for the provision of valuation
      information or price(s) from party(ies) independent of the Sub-Adviser for
      each security or other investment/asset in the Fund for which market
      prices are not readily available; and

            (iv) cooperate with and provide reasonable assistance to the
      Investment Adviser, BNY, the Corporation's administrator, the
      Corporation's custodian and foreign custodians, the Corporation's transfer
      agent and pricing agents and all other agents and representatives of the
      Corporation, and keep all such persons fully informed as to such matters
      as they may reasonably deem necessary to the performance of their
      obligations to the Corporation and the Investment Adviser, provide prompt
      responses to reasonable requests made by such persons and maintain any
      appropriate interfaces with each so as to promote the efficient exchange
      of information.

      C. In furnishing services hereunder, the Sub-Adviser shall be subject to,
and shall perform in accordance with the following: (i) the Corporation's
Articles of Incorporation, as the same may be hereafter modified and/or amended
from time to time ("Certificate of Incorporation"); (ii) the By-Laws of the
Corporation, as the same may be hereafter modified and/or amended from time to
time ("By-Laws"); (iii) the currently effective Prospectus and Statement of
Additional Information of the Corporation filed with the Securities and Exchange
Commission ("SEC") and delivered to the Sub-Adviser, as the same may be
hereafter modified, amended and/or supplemented ("Prospectus and SAI"); (iv) the
Investment Company Act and the Advisers Act and the rules under each, and all
other federal and state laws or regulations applicable to the Corporation and
the Fund(s); (v) any order or no-action letter of the SEC governing the
operation of the Corporation, (vi) the Corporation's Compliance Manual and other
policies and procedures adopted from time to time by the Board of Directors of
the Corporation; and (vii) the written instructions of the Investment Adviser.
Prior to the commencement of the Sub-Adviser's services hereunder, the
Investment Adviser shall provide the Sub-Adviser with current copies of the
Certificate of Incorporation, By-Laws, Prospectus and SAI, any order or
no-action letter of the SEC governing the operation of the Corporation,
Compliance Manual and other relevant policies and procedures that are adopted by
the Board of Directors. The Investment Adviser undertakes to provide the
Sub-Adviser with copies or other written notice of any amendments, modifications
or supplements to any such above-mentioned document.

      D. The Sub-Adviser shall pay its own expenses in connection with the
services to be provided by it pursuant to this Agreement. In addition, the
Sub-Adviser shall be responsible for the compensation of officers or employees
of the Corporation who are also officers or employees of the Sub-Adviser, except
as may otherwise be determined by the Board. The Sub-Adviser hereby agrees to
pay or cause to be paid from its own resources, which may include the
sub-advisory fee paid to it by the Investment Adviser, all fees and expenses of
BNY, the Transfer-Agent, the Administrator and Accounting Agent, and the
Custodian engaged by the Investment Adviser on behalf of the


                                       3



Corporation. Should Sub-Adviser fail to pay or cause to be paid (as required
above) the fees and expenses of BNY, the Transfer Agent, the Administrator and
Accounting Agent, and the Custodian, the Investment Adviser shall pay such
entities from its own resources and shall deduct such payments from the
Sub-Adviser's fee, as necessary. The Corporation is responsible for the payment
of all other expenses associated with its operation including, but not limited
to, (i) brokerage and other expenses (such as stamp taxes) connected with the
execution of portfolio transactions or in connection with creation and
redemption transactions, (ii) taxes, (iii) interest on borrowings, (iv) legal
fees or expenses in connection with any arbitration, litigation or pending or
threatened arbitration or litigation, including any settlements in connection
therewith, (v) compensation and expenses of the Directors of the Corporation who
are not officers, directors, partners or employees of the Investment Adviser,
and Sub-Adviser, or their affiliates (the "Independent Directors") as well as
the cost of Directors' Meetings, (vi) compensation and expenses of counsel to
the Corporation and counsel to the Independent Directors, (vii) if approved by
the Board, compensation and expenses of the Corporation's chief compliance
officer and expenses associated with the Corporation's compliance program,
(viii) fees and expenses of the Corporation's independent auditors, (ix)
registration fees, expenses associated with compliance by the Corporation with
mandatory regulatory mandates including those relating to the development and
distribution of its prospectus and shareholder reports, and extraordinary
expenses, (x) distribution fees and expenses paid by the Corporation under any
distribution plan adopted pursuant to Rule 12b-l under the 1940 Act, (xi) the
cost of director and officer errors and omissions insurance coverage, (xii) the
Funds' pro-rata portion of dues, fees and charges of any trade associations of
which the Corporation is a member, (xiii) certain out-of-pocket expenses,
including, but not limited to cost of obtaining prices for security valuations
(including manual broker quotes), Federal Reserve charges related to securities
transactions, postage and insurance on physical transfer items,
telecommunication charges, and proxy voting execution, advice and reporting etc.
and (xiv) the unitary advisory fee payable to the Investment Advisor pursuant to
the Investment Advisory Agreement. The payment or assumption by the Sub-Adviser
of any expense of the Corporation that the Sub-Adviser is not required by this
Agreement to pay or assume shall not obligate the Sub-Adviser to pay or assume
the same or any similar expense of the Corporation on any subsequent occasion.

In addition, at its expense, Sub-Adviser will furnish (i) all necessary
facilities and personnel, including salaries, expenses and fees of any personnel
required for them to faithfully perform their duties under this Agreement; and
(ii) furnish administrative facilities, including bookkeeping, and all equipment
necessary for the efficient conduct of the Sub-Adviser's duties under this
Agreement.

      E. The Investment Adviser agrees that the Sub-Adviser and its affiliates
may give advice and take action in the performance of their duties with respect
to any of their other clients that may differ from advice given, or the timing
or nature of actions taken, with respect to a Fund. The Investment Adviser also
acknowledges that the Sub-Adviser and its affiliates are fiduciaries to other
entities, some of which have the same or similar investment objectives (and will
hold the same or similar investments) as a Fund, and that the Sub-Adviser will
carry out its duties hereunder together with its duties under such
relationships.

      F. The Sub-Adviser is not authorized to engage in "soft-dollar"
transactions permitted by Section 28(e) of the Securities Exchange Act of 1934,
as amended


                                       4



("Exchange Act"), without the express written approval of the Investment Adviser
or the Corporation's Board of Directors.

      F. The Sub-Adviser will maintain and preserve all accounts, books and
records with respect to each Fund as are required of an investment adviser of a
registered investment company pursuant to the Investment Company Act and
Advisers Act and the rules thereunder.

4. COMPENSATION OF SUB-ADVISER

      The Investment Adviser will pay the Sub-Adviser a fee at the annual rate
of .55 of 1% of each Fund's average daily net assets for the first $5 billion in
assets and .60 of 1% of each Fund's average daily net assets in excess of $5
billion as compensation for providing services in accordance with this
Agreement. The fee will be accrued daily, and will be payable on the last day of
each calendar month for services performed hereunder during that month or on
such other schedule as you shall request of us in writing.

5. LIABILITY AND INDEMNIFICATION

      A. Except as may otherwise be provided by the Investment Company Act or
any other federal securities law, neither the Sub-Adviser nor any of its
officers, members or employees (its "Affiliates") shall be liable for any
losses, claims, damages, liabilities or litigation (including legal and other
expenses) incurred or suffered by the Investment Adviser or the Corporation as a
result of any error of judgment by the Sub-Adviser or its Affiliates with
respect to each Fund, except that nothing in this Agreement shall operate or
purport to operate in any way to exculpate, waive or limit the liability of the
Sub-Adviser or its Affiliates for, and the Sub-Adviser shall indemnify and hold
harmless the Corporation or the Investment Adviser, all affiliated persons
thereof (within the meaning of Section 2(a)(3) of the Investment Company Act)
and all controlling persons (as described in Section 15 of the Securities Act of
1933, as amended ("1933 Act")) (collectively, "Manager Indemnitees") against any
and all losses, claims, damages, liabilities or litigation (including reasonable
legal and other expenses) to which any of the Manager Indemnitees may become
subject under the 1933 Act, the Investment Company Act, the Advisers Act, or
under any other statute, or common law or otherwise arising out of or based on
(i) any breach by the Sub-Adviser of a Sub-Adviser representation or warranty
made herein, (ii) any willful misconduct, bad faith, reckless disregard or
negligence of the Sub-Adviser in the performance of any of its duties or
obligations hereunder or (iii) any untrue statement of a material fact contained
in the Prospectus or SAI, proxy materials, reports, advertisements, sales
literature, or other materials pertaining to the Fund(s) or the omission to
state therein a material fact known to the Sub-Adviser which was required to be
stated therein or necessary to make the statements therein not misleading,
except to the extent such information was furnished to Sub-Adviser by the
Investment Adviser or the Corporation for use therein, or the omission of such
information by the Sub-Adviser was based upon information received from the
Investment Adviser or the Corporation.

      B. Except as may otherwise be provided by the Investment Company Act or
any other federal securities law, the Investment Adviser shall indemnify and
hold harmless


                                       5



the Sub-Adviser, all affiliated persons thereof (within the meaning of Section
2(a)(3) of the Investment Company Act) and all controlling persons (as described
in Section 15 of the 1933 Act) (collectively, "Sub-Adviser Indemnitees") against
any and all losses, claims, damages, liabilities or litigation (including
reasonable legal and other expenses) to which any of the Sub-Adviser Indemnitees
may become subject under the 1933 Act, the Investment Company Act, the Advisers
Act, or under any other statute, at common law or otherwise, arising out of or
based on this Agreement; provided however, the Investment Adviser shall not
indemnify or hold harmless the Sub-Adviser Indemnitees for any losses, claims,
damages, liabilities or litigation (including reasonable legal and other
expenses) arising out of or based on (i) any breach by the Sub-Adviser of a
Sub-Adviser representation or warranty made herein, (ii) any willful misconduct,
bad faith, reckless disregard or negligence of the Sub-Adviser in the
performance of any of its duties or obligations hereunder or (iii) any untrue
statement of a material fact contained in the Prospectus or SAI, proxy
materials, reports, advertisements, sales literature, or other materials
pertaining to the Fund(s) or the omission to state therein a material fact known
to the Sub-Adviser which was required to be stated therein or necessary to make
the statements therein not misleading, unless such statement or omission was
made in reliance upon information furnished to the Sub-Adviser by the Investment
Adviser.

      C. A party seeking indemnification hereunder (the "Indemnified Party")
shall (i) provide prompt notice to the other of any claim ("Claim") for which it
intends to seek indemnification, (ii) grant control of the defense and /or
settlement of the Claim to the other party, and (iii) cooperate with the other
party in the defense thereof. The Indemnified Party shall have the right at its
own expense to participate in the defense of any Claim, but shall not have the
right to control the defense, consent to judgment or agree to the settlement of
any Claim without the written consent of the other party. The party providing
the indemnification shall not consent to the entry of any judgment or enter any
settlement which (i) does not include, as an unconditional term, the release by
the claimant of all liabilities for Claims against the Indemnified Party or (ii)
which otherwise adversely affects the rights of the Indemnified Party.



6. REPRESENTATIONS OF THE INVESTMENT ADVISER

      The Investment Adviser represents, warrants and agrees that:

      A. The Investment Adviser has been duly authorized by the Board of
Directors of the Corporation to delegate to the Sub-Adviser the provision of
investment services to each Fund as contemplated hereby.

      B. The Corporation has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the Investment Company Act and will provide the
Sub-Adviser with a copy of such code of ethics.

      C. The Investment Adviser is currently in compliance and shall at all
times continue to be in compliance with the requirements imposed upon the
Investment Adviser by applicable law and regulations.



                                       6



      D. The Investment Adviser (i) is registered as an investment adviser under
the Advisers Act and will continue to be so registered for so long as this
Agreement remains in effect; (ii) is not prohibited by the Investment Company
Act, the Advisers Act or other law, regulation or order from performing the
services contemplated by this Agreement; (iii) has met and will seek to continue
to meet for so long as this Agreement is in effect, any other applicable federal
or state requirements, or the applicable requirements of any regulatory or
industry self-regulatory agency necessary to be met in order to perform the
services contemplated by this Agreement; (iv) has the authority to enter into
and perform the services contemplated by this Agreement, and (v) will promptly
notify the Sub-Adviser of the occurrence of any event that would disqualify the
Investment Adviser from serving as investment manager of an investment company
pursuant to Section 9(a) of the Investment Company Act or otherwise.

7. REPRESENTATIONS OF THE SUB-ADVISER

      The Sub-Adviser represents, warrants and agrees as follows:

      A. The Sub-Adviser (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this Agreement
remains in effect; (ii) is not prohibited by the Investment Company Act, the
Advisers Act or other law, regulation or order from performing the services
contemplated by this Agreement; (iii) has met and will seek to continue to meet
for so long as this Agreement remains in effect, any other applicable federal or
state requirements, or the applicable requirements of any regulatory or industry
self-regulatory agency necessary to be met in order to perform the services
contemplated by this Agreement; (iv) has the authority to enter into and perform
the services contemplated by this Agreement; and (v) will promptly notify the
Investment Adviser of the occurrence of any event that would disqualify the
Sub-Adviser from serving as an investment adviser of an investment company
pursuant to Section 9(a) of the Investment Company Act or otherwise. The
Sub-Adviser will also promptly notify each Fund and the Investment Adviser if it
is served or otherwise receives notice of any action, suit, proceeding, inquiry
or investigation, at law or in equity, before or by any court, government
agency, self-regulatory organization, public board or body, involving the
affairs of the Fund(s) or the Sub-Adviser, provided, however, that routine
regulatory examinations of the Sub-Adviser shall not be required to be reported
by this provision.

      B. The Sub-Adviser is currently in compliance and shall at all times
continue to be in compliance with the requirements imposed upon the Sub-Adviser
by applicable law and regulations.

      C. The Sub-Adviser has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the Investment Company Act and Rule 204A-1
under the Advisers Act and will provide the Investment Adviser and the Board
with a copy of such code of ethics, together with evidence of its adoption.
Within forty-five days of the end of the last calendar quarter of each year that
this Agreement is in effect, and as otherwise requested, the president, Chief
Operating Officer or a vice-president of the Sub-Adviser shall certify to the
Investment Adviser that the Sub-Adviser has complied with the requirements of
Rule 17j-1 and Rule 204A-1 during the previous year and that


                                       7



there has been no material violation of the Sub-Adviser's code of ethics or, if
such a material violation has occurred, that appropriate action was taken in
response to such violation. Upon the written request of the Investment Adviser,
the Sub-Adviser shall permit the Investment Adviser, its employees or its agents
to examine the reports required to be made to the Sub-Adviser by Rule
17j-1(c)(1) and Rule 204A-1(b) and all other records relevant to the
Sub-Adviser's code of ethics.

      D. The Sub-Adviser has provided the Corporation and the Investment Adviser
with a copy of its Form ADV, which as of the date of this Agreement is its Form
ADV as most recently filed with the SEC and promptly will furnish a copy of all
amendments to the Corporation and the Investment Adviser at least annually. Such
amendments shall reflect all changes in the Sub-Adviser's organizational
structure, professional staff or other significant developments affecting the
Sub-Adviser, as required by the Advisers Act.

      F. The Sub-Adviser agrees to maintain an appropriate level of errors and
omissions or professional liability insurance coverage.

      G. The Sub-Adviser agrees that neither it, nor any of its affiliates, will
knowingly in any way refer directly or indirectly to its relationship with the
Corporation, the Fund(s), the Investment Adviser or any of their respective
affiliates in offering, marketing or other promotional materials without the
express written consent of the Investment Adviser, except as required by rule,
regulation or upon the request of a governmental authority.

8. NON-EXCLUSIVITY

      The services of the Sub-Adviser to the Investment Adviser, the Fund(s) and
the Corporation are not to be deemed to be exclusive, and the Sub-Adviser shall
be free to render investment advisory or other services to others and to engage
in other activities. It is understood and agreed that the directors, officers,
and employees of the Sub-Adviser are not prohibited from engaging in any other
business activity or from rendering services to any other person, or from
serving as partners, officers, directors, trustees, or employees of any other
firm or corporation.

9. SUPPLEMENTAL ARRANGEMENTS

      The Sub-Adviser may from time to time employ or associate itself with any
person it believes to be particularly suited to assist it in providing the
services to be performed by such Sub-Adviser hereunder, provided that no such
person shall perform any services with respect to the Fund(s) that would
constitute an assignment or require a written advisory agreement pursuant to the
Investment Company Act. Any compensation payable to such persons shall be the
sole responsibility of the Sub-Adviser, and neither the Investment Adviser nor
the Corporation shall have any obligations with respect thereto or otherwise
arising under the Agreement.

10. REGULATION

      The Sub-Adviser shall submit to all regulatory and administrative bodies
having jurisdiction over the services provided pursuant to this Agreement any
information,


                                       8



reports, or other material which any such body by reason of this Agreement may
request or require pursuant to applicable laws and regulations and shall
promptly provide the Investment Adviser and Corporation with copies of such
information, reports and materials.

11. RECORDS

      The records relating to the services provided under this Agreement shall
be the property of the Corporation and shall be under its control; however, the
Corporation shall furnish to the Sub-Adviser such records and permit it to
retain such records (either in original or in duplicate form) as it shall
reasonably require in order to carry out its business. In the event of the
termination of this Agreement, such other records shall promptly be returned to
the Corporation by the Sub-Adviser free from any claim or retention of rights
therein, provided that the Sub-Adviser may retain any such records that are
required by law or regulation. The Investment Adviser and the Sub-Adviser shall
keep confidential any information obtained in connection with its duties
hereunder and disclose such information only if the Corporation has authorized
such disclosure or if such disclosure is expressly required or requested by
applicable federal or state regulatory authorities, or otherwise required by
law.

12. DURATION OF AGREEMENT

This Agreement shall become effective upon the date first above written,
provided that this Agreement shall not take effect unless it has first been
approved: (i) by a vote of a majority of those Directors of the Corporation who
are not "interested persons" (as defined in the Investment Company Act) of any
party to this Agreement ("Independent Directors"), cast in person at a meeting
called for the purpose of voting on such approval, and (ii) by vote of a
majority of the Fund's outstanding securities. This Agreement shall continue in
effect for a period more than two years from the date of its execution only so
long as such continuance is specifically approved at least annually by the Board
of Directors provided that in such event such continuance shall also be approved
by the vote of a majority of the Independent Directors cast in person at a
meeting called for the purpose of voting on such approval. Additional Funds may
be added to Appendix A by the Investment Adviser upon sixty (60) days written
notice to the Sub-Adviser and only after the approval by the Board of Directors
of the Corporation, including a majority of the Independent Directors, cast in
person at a meeting called for the purpose of voting such approval and, if
required under the 1940 Act, a majority of the outstanding voting securities (as
defined in the Investment Company Act) of the Fund.

13. TERMINATION OF AGREEMENT

      This Agreement may be terminated with respect to any Fund at any time,
without the payment of any penalty, by the Board of Directors, including a
majority of the Independent Directors, by the vote of a majority of the
outstanding voting securities of such Fund, on sixty (60) days' written notice
to the Investment Adviser and the Sub-Adviser. This Agreement will automatically
terminate, without the payment of any penalty in the event the Investment
Advisory Agreement between the Investment Adviser and the Corporation is
assigned (as defined in the Investment Company Act) or


                                       9



terminates for any other reason. This Agreement will also terminate upon written
notice to the other party that the other party is in material breach of this
Agreement, unless the other party in material breach of this Agreement cures
such breach to the reasonable satisfaction of the party alleging the breach
within thirty (30) days after written notice. Any "assignment" (as that term is
defined in the Investment Company Act) of this Agreement will result in
automatic termination of this Agreement. The Sub-Adviser will notify the
Corporation and the Investment Adviser of any such assignment and of any changes
in key personnel who are either the portfolio manager(s) of the Funds or senior
management of the Sub-Adviser, in each case prior to or promptly after, such
change. The Sub-Adviser agrees to bear all reasonable legal, printing, mailing,
proxy and related expenses of the Corporation and the Investment Adviser, if
any, arising out of an assignment of this Agreement by the Sub-Adviser.

14. AMENDMENTS TO THE AGREEMENT

      Except to the extent permitted by the Investment Company Act or the rules
or regulations thereunder or pursuant to exemptive relief granted by the SEC,
this Agreement may be amended by the parties with respect to any Fund only if
such amendment, if material, is specifically approved by the vote of a majority
of the outstanding voting securities of such Fund (unless such approval is not
required by Section 15 of the Investment Company Act as interpreted by the SEC
or its staff or unless the SEC has granted an exemption from such approval
requirement) and by the vote of a majority of the Independent Directors cast in
person at a meeting called for the purpose of voting on such approval. The
required shareholder approval shall be effective with respect to the Fund if a
majority of the outstanding voting securities of the Fund vote to approve the
amendment, notwithstanding that the amendment may not have been approved by a
majority of the outstanding voting securities of any other Fund affected by the
amendment or all the Funds of the Corporation.

15. ASSIGNMENT

      The Sub-Adviser shall not assign or transfer its rights and obligations
under this Agreement. Any assignment (as that term is defined in the Investment
Company Act) of the Agreement shall result in the automatic termination of this
Agreement, as provided in Section 13 hereof. The Sub-Adviser agrees to bear all
reasonable legal, printing, mailing, proxy and related expenses of the
Corporation and the Investment Adviser, if any, arising out of any assignment of
this Agreement by the Sub-Adviser. Notwithstanding the foregoing, no assignment
shall be deemed to result from any changes in the directors, officers or
employees of such Sub-Adviser except as may be provided to the contrary in the
Investment Company Act or the rules or regulations thereunder.

16. ENTIRE AGREEMENT

      This Agreement contains the entire understanding and agreement of the
parties with respect to each Fund.


                                       10



17. HEADINGS

      The headings in the sections of this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.

18. NOTICES

      All notices required to be given pursuant to this Agreement shall be
delivered or mailed to the last known business address of the Investment Adviser
or Sub-Adviser in person or by registered mail or a private mail or delivery
service providing the sender with notice of receipt. Notice shall be deemed
given on the date delivered or mailed in accordance with this section.

19. SEVERABILITY AND SURVIVAL

Should any portion of this Agreement for any reason be held to be void in law or
in equity, the Agreement shall be construed, insofar as is possible, as if such
portion had never been contained herein. Sections 5, 11 and 20 shall survive the
termination of this Agreement.

20. CORPORATION AND SHAREHOLDER LIABILITY

      The Sub-Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Corporation's Certificate of
Incorporation and agrees that obligations, if any, assumed by the Corporation
pursuant to this Agreement shall be limited in all cases to the Corporation and
its assets, and if the liability relates to one or more series, the obligations
hereunder shall be limited to the respective assets of the Fund. The Sub-Adviser
further agrees that it shall not seek satisfaction of any such obligation from
the shareholders or any individual shareholder of the Fund(s), nor from the
Directors or any individual Director of the Corporation.

21. GOVERNING LAW

      The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of New York, or any of the applicable
provisions of the Investment Company 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 Investment Company Act, the latter shall control.

22. INTERPRETATION

      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
Investment Company Act shall be resolved by reference to such term or provision
of the Investment Company 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
Investment Company Act. Specifically, the terms "vote of a majority of the
outstanding voting securities," "interested persons," "assignment," and

                                       11



"affiliated persons," as used herein shall have the meanings assigned to them by
Section 2(a) of the Investment Company Act. In addition, where the effect of a
requirement of the Investment Company Act 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.



                           [SIGNATURE PAGE TO FOLLOW]



                                       12




      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first mentioned above.


XSHARES ADVISORS LLC               AMERIVEST INVESTMENT MANAGEMENT, LLC

By:  /s/ David W. Jaffin           By: /s/ William J. Vulpis
     ----------------------------      ----------------------------------
     Name:  David W. Jaffin             Name:  William J. Vulpis
     Title: Chief Financial Officer     Title: President



                                       13



                                   APPENDIX A
                                       TO
                             SUB-ADVISORY AGREEMENT



TDAX Independence 2010 Exchange-Traded Fund
TDAX Independence 2020 Exchange-Traded Fund
TDAX Independence 2030 Exchange-Traded Fund
TDAX Independence 2040 Exchange-Traded Fund
TDAX Independence In-Target Exchange-Traded Fund






Dated:  July 24, 2007






                                                                  Exhibit (d)(3)


                             SUB-ADVISORY AGREEMENT


      AGREEMENT, dated as of July 24, 2007 by and between XShares Advisors LLC
(the "Investment Adviser"), a Delaware limited liability company having its
principal office and place of business at 420 Lexington Avenue, Suite 2550, New
York, NY 10170, and BNY Investment Advisors (the "Sub-Adviser"), a separately
identifiable division of the Bank of New York, a New York state banking
corporation having its principal office and place of business at 1633 Broadway,
13th floor, New York, New York 10019.

      WHEREAS, the Investment Adviser is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended ("Advisers Act");

      WHEREAS, the Investment Adviser has entered into an Investment Advisory
Agreement dated as of July 24, 2007 with TDAX Funds, Inc. (the "Corporation") an
investment company registered under the Investment Company Act of 1940, as
amended ("Investment Company Act");

      WHEREAS, the Investment Adviser has entered into a separate Sub-Advisory
Agreement dated as of July 24, 2007 with Amerivest Investment Management, LLC
("Amerivest"), a registered investment adviser under the Advisers Act;

      WHEREAS, the Sub-Adviser is registered as an investment adviser under the
Advisers Act;

      WHEREAS, the Board of Directors of the Corporation and the Investment
Adviser desire to retain the Sub-Adviser to render investment advisory and other
services to the funds specified in Appendix A hereto, as amended from time to
time, each a series of the Corporation (each a "Fund" and collectively, the
"Funds"), in the manner and on the terms hereinafter set forth;

      WHEREAS, the Investment Adviser has the authority under the Investment
Advisory Agreement, with the consent of the Board of Directors of the
Corporation (the "Board" or the "Directors") to select sub-advisers for each
Fund; and

      WHEREAS, the Sub-Adviser is willing to furnish such services to the
Investment Adviser and each Fund;

      NOW, THEREFORE, the Investment Adviser and the Sub-Adviser agree as
follows:

1. APPOINTMENT OF THE SUB-ADVISER

      The Investment Adviser hereby appoints the Sub-Adviser to act as a
sub-adviser for each Fund, subject to the supervision and oversight of the
Investment Adviser, Amerivest and the Directors of the Corporation, and in
accordance with the terms and conditions of this Agreement. The Sub-Adviser will
be an independent contractor and will have no authority to act for or represent
the Corporation or the Investment Adviser in any way or otherwise be deemed an
agent of the Corporation or the Investment Adviser except as expressly
authorized in this Agreement or another writing by the Corporation, the
Investment Adviser and the Sub-Adviser.

2. ACCEPTANCE OF APPOINTMENT

      The Sub-Adviser accepts that appointment and agrees to render the services
herein set forth, for the compensation herein provided.

      The assets of each Fund will be maintained in the custody of a custodian
(who shall be identified by the Investment Adviser in writing). The Sub-Adviser
will not have custody of any securities, cash or other assets of the Fund and
will not be liable for any loss resulting from any act or omission of the
custodian other than acts or omissions arising in reliance on instructions of
the Sub-Adviser.





3. SERVICES TO BE RENDERED BY THE SUB-ADVISER TO THE CORPORATION

      A. As sub-adviser to each Fund, the Sub-Adviser will coordinate the
investment and reinvestment of the assets of the Fund and determine the
composition of the assets of the Fund, in accordance with the terms of this
Agreement, the Fund's Prospectus and Statement of Additional Information and
subject to the direction, supervision and control of the Investment Adviser and
the Directors of the Corporation.

      B. As part of the services it will provide hereunder, the Sub-Adviser
will:

            (i) formulate and implement a continuous investment program and
      portfolio management compliance and reporting program for each Fund;

            (ii) take whatever steps it deems necessary or advisable to
      implement the investment program for each Fund by arranging for the
      purchase and sale of securities and other investments;

            (iii) coordinate with Amerivest to keep the Directors of the
      Corporation and the Investment Adviser fully informed on an ongoing basis
      of all material facts concerning the investment and reinvestment of the
      assets of each Fund and the operations of the Sub-Adviser, make regular
      and periodic special written reports of such additional information
      concerning the same as may reasonably be requested from time to time by
      the Investment Adviser or the Directors of the Corporation, and attend
      meetings with the Investment Adviser and/or the Directors, as reasonably
      requested, to discuss the foregoing;

            (iv) in accordance with procedures and methods established by the
      Directors of the Corporation, which may be amended from time to time, and
      in conjunction with Amerivest, promptly notify the Investment Adviser or
      the Directors of the Corporation of securities in a Fund for which fair
      valuation may be required or of significant events that may require fair
      value pricing of all or a portion of a Fund's portfolio, provide
      assistance in determining the fair value of all securities and other
      investments/assets in the Fund, as necessary, and use reasonable efforts
      to arrange for the provision of valuation information or price(s) from
      party(ies) independent of the Sub-Adviser for each security or other
      investment/asset in the Fund for which market prices are not readily
      available; and

            (v) cooperate with and provide reasonable assistance to the
      Investment Adviser, Amerivest, the Corporation's administrator, the
      Corporation's custodian and foreign custodians, the Corporation's transfer
      agent and pricing agents and all other agents and representatives of the
      Corporation and the Investment Adviser, keep all such persons fully
      informed as to such matters as they may reasonably deem necessary to the
      performance of their obligations to the Corporation and the Investment
      Adviser, provide prompt responses to reasonable requests made by such
      persons and maintain any appropriate interfaces with each so as to promote
      the efficient exchange of information.


      C. In furnishing services hereunder, the Sub-Adviser shall be subject to,
and shall perform in accordance with the following: (i) the Corporation's
Articles of Incorporation, as the same may be hereafter modified and/or amended
from time to time ("Certificate of Incorporation"); (ii) the By-Laws of the
Corporation, as the same may be hereafter modified and/or amended from time to
time ("By-Laws"); (iii) the currently effective Prospectus and Statement of
Additional Information of the Corporation filed with the Securities and Exchange
Commission ("SEC") and delivered to the Sub-Adviser, as the same may be
hereafter modified, amended and/or supplemented ("Prospectus and SAI"); (iv) the
Investment Company Act and the Advisers Act and the rules under each, and all
other federal and state laws or regulations applicable to the Corporation and
the Fund(s); (v) any order or no-action letter of the SEC governing the
operation of the Corporation, (vi) the Corporation's Compliance Manual and other
policies and procedures adopted from time to time by the Board of Directors of
the Corporation; and (vii) the written instructions of the Investment Adviser.
Prior to the commencement of the Sub-Adviser's services hereunder, the
Investment Adviser shall provide the Sub-Adviser with current copies of the
Certificate of Incorporation, By-Laws, Prospectus and SAI, any order or
no-action letter of the SEC governing the operation of the Corporation,
Compliance Manual and other relevant policies and procedures that are adopted by
the Board


                                       2



of Directors. The Investment Adviser undertakes to provide the Sub-Adviser with
copies or other written notice of any amendments, modifications or supplements
to any such above-mentioned document.

      D. The Sub-Adviser, at its expense, will furnish: (i) all necessary
facilities and personnel, including salaries, expenses and fees of any personnel
required for them to faithfully perform their duties under this Agreement; and
(ii) administrative facilities, including bookkeeping, and all equipment
necessary for the efficient conduct of the Sub-Adviser's duties under this
Agreement.

      E. The Sub-Adviser will select brokers and dealers to effect all Fund
transactions subject to the conditions set forth herein. The Sub-Adviser will
place all necessary orders with brokers, dealers, or issuers, and will negotiate
brokerage commissions, if applicable. The Sub-Adviser is directed at all times
to seek to execute transactions for each Fund (i) in accordance with any written
policies, practices or procedures that may be established by the Board of
Directors or the Investment Adviser from time to time and which have been
provided to the Sub-Adviser, (ii) as described in the Corporation's Prospectus
and SAI, and (iii) in accordance with applicable federal and state laws and
regulations. In placing any orders for the purchase or sale of investments for
each Fund, in the name of the Fund or its nominees, the Sub-Adviser shall use
its best efforts to obtain for the Fund "best execution", considering all of the
circumstances, and shall maintain records adequate to demonstrate compliance
with this requirement. In no instance will Fund securities be purchased from or
sold to the Sub-Adviser, or any affiliated person thereof, except in accordance
with the Investment Company Act, the Advisers Act and the rules under each, and
all other federal and state laws and regulations applicable to the Corporation
and the Fund.

      F. The Sub-Adviser is not authorized to engage in "soft-dollar"
transactions permitted by Section 28(e) of the Securities Exchange Act of 1934,
as amended ("Exchange Act"), without the express written approval of the Adviser
or the Corporation's Board of Directors.

      G. On occasions when the Sub-Adviser deems the purchase or sale of a
security to be in the best interest of the Fund(s) as well as other clients of
the Sub-Adviser, the Sub-Adviser 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 efficient execution. Allocation of the securities so
purchased or sold, as well as the expenses incurred in the transaction, will be
made by the Sub-Adviser in the manner which the Sub-Adviser considers to be the
most equitable and consistent with its fiduciary obligations to each Fund and to
its other clients over time. The Investment Adviser agrees that the Sub-Adviser
and its affiliates may give advice and take action in the performance of their
duties with respect to any of their other clients that may differ from advice
given, or the timing or nature of actions taken, with respect to the Fund. The
Investment Adviser also acknowledges that the Sub-Adviser and its affiliates are
fiduciaries to other entities, some of which have the same or similar investment
objectives (and will hold the same or similar investments) as the Fund, and that
the Sub-Adviser will carry out its duties hereunder together with its duties
under such relationships.

      H. The Sub-Adviser will maintain and preserve all accounts, books and
records with respect to each Fund as are required of an investment adviser of a
registered investment company pursuant to the Investment Company Act and
Advisers Act and the rules thereunder and shall file with the SEC all forms
pursuant to Section 13 of the Exchange Act, with respect to its duties as are
set forth herein.

      I. The Sub-Adviser will, unless and until otherwise directed by the
Investment Adviser or the Board of Directors, exercise all rights of security
holders with respect to securities held by each Fund, including, but not limited
to: voting proxies in accordance with the Corporation's then-current proxy
voting policies, converting, tendering, exchanging or redeeming securities;
acting as a claimant in class action litigation (including litigation with
respect to securities previously held); and exercising rights in the context of
a bankruptcy or other reorganization.


4. COMPENSATION OF SUB-ADVISER

      The Investment Adviser will pay, or cause Amerivest to pay, the
Sub-Adviser as compensation for providing services in accordance with this
Agreement those fees as set forth in Appendix B. In addition, Sub-Adviser shall
be reimbursed by the Corporation for any out-of-pocket expenses incurred by the
Sub-Adviser which traditionally include, but are not limited to, cost of
obtaining prices for security valuations


                                       3



(including manual broker quotes), Federal Reserve charges related to securities
transactions, postage and insurance on physical transfer items,
telecommunication charges, proxy voting execution, advice and reporting etc.
These expenses will be billed as they are incurred.


5. LIABILITY AND INDEMNIFICATION

      A. Except as may otherwise be provided by the Investment Company Act or
any other federal securities law, neither the Sub-Adviser nor any of its
officers, members or employees (its "Affiliates") shall be liable for any
losses, claims, damages, liabilities or litigation (including legal and other
expenses) incurred or suffered by the Investment Adviser or the Corporation as a
result of any error of judgment by the Sub-Adviser or its Affiliates with
respect to each Fund, except that nothing in this Agreement shall operate or
purport to operate in any way to exculpate, waive or limit the liability of the
Sub-Adviser or its Affiliates for, and the Sub-Adviser shall indemnify and hold
harmless the Corporation, the Investment Adviser, all affiliated persons thereof
(within the meaning of Section 2(a)(3) of the Investment Company Act) and all
controlling persons (as described in Section 15 of the Securities Act of 1933,
as amended ("1933 Act")) (collectively, "Manager Indemnitees") against any and
all losses, claims, damages, liabilities or litigation (including reasonable
legal and other expenses) to which any of the Manager Indemnitees may become
subject under the 1933 Act, the Investment Company Act, the Advisers Act, or
under any other statute, or common law or otherwise arising out of or based on
(i) any breach by the Sub-Adviser of a Sub-Adviser representation or warranty
made herein, (ii) any willful misconduct, bad faith, reckless disregard or
negligence of the Sub-Adviser in the performance of any of its duties or
obligations hereunder or (iii) any untrue statement of a material fact contained
in the Prospectus or SAI, proxy materials, reports, advertisements, sales
literature, or other materials pertaining to the Fund(s) or the omission to
state therein a material fact known to the Sub-Adviser which was required to be
stated therein or necessary to make the statements therein not misleading, if
such statement or omission was made in reliance upon information furnished to
the Investment Adviser or the Corporation, or the omission of such information,
by the Sub-Adviser Indemnitees (as defined below) for use therein.

      B. Except as may otherwise be provided by the Investment Company Act or
any other federal securities law, the Investment Adviser shall indemnify and
hold harmless the Sub-Adviser, all affiliated persons thereof (within the
meaning of Section 2(a)(3) of the Investment Company Act) and all controlling
persons (as described in Section 15 of the 1933 Act) (collectively, "Sub-Adviser
Indemnitees") against any and all losses, claims, damages, liabilities or
litigation (including reasonable legal and other expenses) to which any of the
Sub-Adviser Indemnitees may become subject under the 1933 Act, the Investment
Company Act, the Advisers Act, or under any other statute, at common law or
otherwise, arising out of or based on this Agreement; provided however, the
Investment Adviser shall not indemnify or hold harmless the Sub-Adviser
Indemnitees for any losses, claims, damages, liabilities or litigation
(including reasonable legal and other expenses) arising out of or based on (i)
any breach by the Sub-Adviser of a Sub-Adviser representation or warranty made
herein, (ii) any willful misconduct, bad faith, reckless disregard or negligence
of the Sub-Adviser in the performance of any of its duties or obligations
hereunder or (iii) any untrue statement of a material fact contained in the
Prospectus or SAI, proxy materials, reports, advertisements, sales literature,
or other materials pertaining to the Fund(s) or the omission to state therein a
material fact known to the Sub-Adviser which was required to be stated therein
or necessary to make the statements therein not misleading, if such statement or
omission was made in reliance upon information furnished to the Investment
Adviser or the Corporation, or the omission of such information, by the
Sub-Adviser Indemnities for use therein.

      C. A party seeking indemnification hereunder (the "Indemnified Party")
shall (i) provide prompt notice to the other of any claim ("Claim") for which it
intends to seek indemnification, (ii) grant control of the defense and /or
settlement of the Claim to the other party, and (iii) cooperate with the other
party in the defense thereof. The Indemnified Party shall have the right at its
own expense to participate in the defense of any Claim, but shall not have the
right to control the defense, consent to judgment or agree to the settlement of
any Claim without the written consent of the other party. The party providing
the indemnification shall not consent to the entry of any judgment or enter any
settlement which (i) does not include, as an unconditional term, the release by
the claimant of all liabilities for Claims against the Indemnified Party or (ii)
which otherwise adversely affects the rights of the Indemnified Party.


                                       4




6. REPRESENTATIONS OF THE INVESTMENT ADVISER

      The Investment Adviser represents, warrants and agrees that:

      A. The Investment Adviser has been duly authorized by the Board of
Directors of the Corporation to delegate to the Sub-Adviser the provision of
investment services to each Fund as contemplated hereby.

      B. The Corporation has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the Investment Company Act and will provide the
Sub-Adviser with a copy of such code of ethics.

      C. The Investment Adviser is currently in compliance and shall at all
times continue to be in compliance with the requirements imposed upon the
Investment Adviser by applicable law and regulations.

      D. The Investment Adviser (i) will be registered as an investment adviser
under the Advisers Act prior to the commencement of operation of the Funds and
thereafter will continue to be so registered for so long as this Agreement
remains in effect; (ii) is not prohibited by the Investment Company Act, the
Advisers Act or other law, regulation or order from performing the services
contemplated by this Agreement; (iii) has met and will seek to continue to meet
for so long as this Agreement is in effect, any other applicable federal or
state requirements, or the applicable requirements of any regulatory or industry
self-regulatory agency necessary to be met in order to perform the services
contemplated by this Agreement; (iv) has the authority to enter into and perform
the services contemplated by this Agreement, and (v) will promptly notify the
Sub-Adviser of the occurrence of any event that would disqualify the Investment
Adviser from serving as investment manager of an investment company pursuant to
Section 9(a) of the Investment Company Act or otherwise.


7. REPRESENTATIONS OF THE SUB-ADVISER

      The Sub-Adviser represents, warrants and agrees as follows:

      A. The Sub-Adviser (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this Agreement
remains in effect; (ii) is not prohibited by the Investment Company Act, the
Advisers Act or other law, regulation or order from performing the services
contemplated by this Agreement; (iii) has met and will seek to continue to meet
for so long as this Agreement remains in effect, any other applicable federal or
state requirements, or the applicable requirements of any regulatory or industry
self-regulatory agency necessary to be met in order to perform the services
contemplated by this Agreement; (iv) has the authority to enter into and perform
the services contemplated by this Agreement; and (v) will promptly notify the
Investment Adviser of the occurrence of any event that would disqualify the
Sub-Adviser from serving as an investment adviser of an investment company
pursuant to Section 9(a) of the Investment Company Act or otherwise. The
Sub-Adviser will also promptly notify each Fund and the Investment Adviser if it
is served or otherwise receives notice of any action, suit, proceeding, inquiry
or investigation, at law or in equity, before or by any court, government
agency, self-regulatory organization, public board or body, involving the
affairs of the Fund(s) or the Sub-Adviser, provided, however, that routine
regulatory examinations of the Sub-Adviser shall not be required to be reported
by this provision.

      B. The Sub-Adviser is currently in compliance and shall at all times
continue to be in compliance with the requirements imposed upon the Sub-Adviser
by applicable law and regulations.

      C. The Sub-Adviser has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the Investment Company Act and Rule 204A-1
under the Advisers Act and will provide the Investment Adviser and the Board
with a copy of such code of ethics, together with evidence of its adoption.
Within forty-five days of the end of the last calendar quarter of each year that
this Agreement is in effect, and as otherwise requested, the president, Chief
Operating Officer or a vice-president of the Sub-Adviser shall certify to the
Investment Adviser that the Sub-Adviser has complied with the requirements of


                                       5



Rule 17j-1 and Rule 204A-1 during the previous year and that there has been no
material violation of the Sub-Adviser's code of ethics or, if such a material
violation has occurred, that appropriate action was taken in response to such
violation. Upon the written request of the Investment Adviser, the Sub-Adviser
shall permit the Investment Adviser, its employees or its agents to examine the
reports required to be made to the Sub-Adviser by Rule 17j-1(c)(1) and Rule
204A-1(b) and all other records relevant to the Sub-Adviser's code of ethics.

      D. The Sub-Adviser has provided the Corporation and the Investment Adviser
with a copy of its Form ADV, which as of the date of this Agreement is its Form
ADV as most recently filed with the SEC and promptly will furnish a copy of all
amendments to the Corporation and the Investment Adviser at least annually. Such
amendments shall reflect all changes in the Sub-Adviser's organizational
structure, professional staff or other significant developments affecting the
Sub-Adviser, as required by the Advisers Act.

      F. The Sub-Adviser agrees to maintain an appropriate level of errors and
omissions or professional liability insurance coverage.

      G. The Sub-Adviser agrees that neither it, nor any of its affiliates, will
knowingly in any way refer directly or indirectly to its relationship with the
Corporation, the Fund(s), the Investment Adviser or any of their respective
affiliates in offering, marketing or other promotional materials without the
express written consent of the Investment Adviser, except as required by rule,
regulation or upon the request of a governmental authority.


8. NON-EXCLUSIVITY

      The services of the Sub-Adviser to the Investment Adviser, the Fund(s) and
the Corporation are not to be deemed to be exclusive, and the Sub-Adviser shall
be free to render investment advisory or other services to others and to engage
in other activities. It is understood and agreed that the directors, officers,
and employees of the Sub-Adviser are not prohibited from engaging in any other
business activity or from rendering services to any other person, or from
serving as partners, officers, directors, trustees, or employees of any other
firm or corporation.

9. SUPPLEMENTAL ARRANGEMENTS

      The Sub-Adviser may from time to time employ or associate itself with any
person it believes to be particularly suited to assist it in providing the
services to be performed by such Sub-Adviser hereunder, provided that no such
person shall perform any services with respect to the Fund(s) that would
constitute an assignment or require a written advisory agreement pursuant to the
Investment Company Act. Any compensation payable to such persons shall be the
sole responsibility of the Sub-Adviser, and neither the Investment Adviser nor
the Corporation shall have any obligations with respect thereto or otherwise
arising under the Agreement.

10. REGULATION

      The Sub-Adviser shall submit to all regulatory and administrative bodies
having jurisdiction over the services provided pursuant to this Agreement any
information, reports, or other material which any such body by reason of this
Agreement may request or require pursuant to applicable laws and regulations and
shall promptly provide the Advisor and Corporation with copies of such
information, reports and materials.

11. RECORDS

      The records relating to the services provided under this Agreement shall
be the property of the Corporation and shall be under its control; however, the
Corporation shall furnish to the Sub-Adviser such records and permit it to
retain such records (either in original or in duplicate form) as it shall
reasonably require in order to carry out its business. In the event of the
termination of this Agreement, such other records shall promptly be returned to
the Corporation by the Sub-Adviser free from any claim or retention of rights
therein, provided that the Sub-Adviser may retain any such records that are
required by law or regulation. The Investment Adviser and the Sub-Adviser shall
keep confidential any information obtained


                                       6



in connection with its duties hereunder and disclose such information only if
the Corporation has authorized such disclosure or if such disclosure is
expressly required or requested by applicable federal or state regulatory
authorities, or otherwise required by law.

12. DURATION OF AGREEMENT

This Agreement shall become effective upon the date first above written,
provided that this Agreement shall not take effect unless it has first been
approved: (i) by a vote of a majority of those Directors of the Corporation who
are not "interested persons" (as defined in the Investment Company Act) of any
party to this Agreement ("Independent Directors"), cast in person at a meeting
called for the purpose of voting on such approval, and (ii) by vote of a
majority of the Fund's outstanding securities. This Agreement shall continue in
effect for a period more than two years from the date of its execution only so
long as such continuance is specifically approved at least annually by the Board
of Directors provided that in such event such continuance shall also be approved
by the vote of a majority of the Independent Directors cast in person at a
meeting called for the purpose of voting on such approval. Additional Funds may
be added to Appendix A by the Investment Adviser upon sixty (60) days written
notice to the Sub-Adviser and only after the approval by the Board of Directors
of the Corporation, including a majority of the Independent Directors, cast in
person at a meeting called for the purpose of voting such approval and, if
required under the 1940 Act, a majority of the outstanding voting securities (as
defined in the Investment Company Act) of the Fund.

13. TERMINATION OF AGREEMENT

      This Agreement may be terminated with respect to any Fund at any time,
without the payment of any penalty, by the Board of Directors, including a
majority of the Independent Directors, by the vote of a majority of the
outstanding voting securities of such Fund, on sixty (60) days' written notice
to the Investment Adviser and the Sub-Adviser. This Agreement will automatically
terminate, without the payment of any penalty in the event the Investment
Advisory Agreement between the Investment Adviser and the Corporation is
assigned (as defined in the Investment Company Act) or terminates for any other
reason. This Agreement will also terminate upon written notice to the other
party that the other party is in material breach of this Agreement, unless the
other party in material breach of this Agreement cures such breach to the
reasonable satisfaction of the party alleging the breach within thirty (30) days
after written notice. Any "assignment" (as that term is defined in the
Investment Company Act) of this Agreement will result in automatic termination
of this Agreement. The Sub-Adviser will notify the Corporation and the
Investment Adviser of any such assignment and of any changes in key personnel
who are either the portfolio manager(s) of the Funds or senior management of the
Sub-Adviser, in each case prior to or promptly after, such change. The
Sub-Adviser agrees to bear all reasonable legal, printing, mailing, proxy and
related expenses of the Corporation and the Investment Adviser, if any, arising
out of an assignment of this Agreement by the Sub-Adviser.

14. AMENDMENTS TO THE AGREEMENT

      Except to the extent permitted by the Investment Company Act or the rules
or regulations thereunder or pursuant to exemptive relief granted by the SEC,
this Agreement may be amended by the parties with respect to any Fund only if
such amendment, if material, is specifically approved by the vote of a majority
of the outstanding voting securities of such Fund (unless such approval is not
required by Section 15 of the Investment Company Act as interpreted by the SEC
or its staff or unless the SEC has granted an exemption from such approval
requirement) and by the vote of a majority of the Independent Directors cast in
person at a meeting called for the purpose of voting on such approval. The
required shareholder approval shall be effective with respect to the Fund if a
majority of the outstanding voting securities of the Fund vote to approve the
amendment, notwithstanding that the amendment may not have been approved by a
majority of the outstanding voting securities of any other Fund affected by the
amendment or all the Funds of the Corporation.

15. ASSIGNMENT

      The Sub-Adviser shall not assign or transfer its rights and obligations
under this Agreement. Any assignment (as that term is defined in the Investment
Company Act) of the Agreement shall result in the automatic termination of this
Agreement, as provided in Section 13 hereof. The Sub-Adviser agrees to bear


                                       7



all reasonable legal, printing, mailing, proxy and related expenses of the
Corporation and the Investment Adviser, if any, arising out of any assignment of
this Agreement by the Sub-Adviser. Notwithstanding the foregoing, no assignment
shall be deemed to result from any changes in the directors, officers or
employees of such Sub-Adviser except as may be provided to the contrary in the
Investment Company Act or the rules or regulations thereunder.

16. ENTIRE AGREEMENT

      This Agreement contains the entire understanding and agreement of the
parties with respect to each Fund.

17. HEADINGS

      The headings in the sections of this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.


18. NOTICES

      All notices required to be given pursuant to this Agreement shall be
delivered or mailed to the address listed below of each applicable party in
person or by registered or certified mail or a private mail or delivery service
providing the sender with notice of receipt or such other address as specified
in a notice duly given to the other parties. Notice shall be deemed given on the
date delivered or mailed in accordance with this paragraph.

     For:   BNY Investment Advisors
            Kurt Zyla
            1633 Broadway, 13th Floor
            New York, New York 10019

     For:   XShares Advisors LLC
            420 Lexington Avenue
            Suite 2550
            New York, 10170

     For:   TDAX Funds, Inc.
            420 Lexington Avenue
            Suite 2550
            New York, NY 10170

            With a copy to:
            XShares Advisors LLC
            420 Lexington Avenue
            Suite 2550
            New York, NY 10170

     For:   Amerivest Investment Management, LLC
            1005 North Ameritrade Place
            Bellevue, NE 68005


19. SEVERABILITY AND SURVIVAL

Should any portion of this Agreement for any reason be held to be void in law or
in equity, the Agreement shall be construed, insofar as is possible, as if such
portion had never been contained herein. Sections 5, 11 and 20 shall survive the
termination of this Agreement.


20. CORPORATION AND SHAREHOLDER LIABILITY




                                       8



      The Sub-Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Certificate of Incorporation and
agrees that obligations, if any, assumed by the Corporation pursuant to this
Agreement shall be limited in all cases to the Corporation and its assets, and
if the liability relates to one or more series, the obligations hereunder shall
be limited to the respective assets of the Fund. The Sub-Adviser further agrees
that it shall not seek satisfaction of any such obligation from the shareholders
or any individual shareholder of the Fund(s), nor from the Directors or any
individual Director of the Corporation.

21. GOVERNING LAW

      The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of New York, or any of the applicable
provisions of the Investment Company 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 Investment Company Act, the latter shall control.

22. INTERPRETATION

      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
Investment Company Act shall be resolved by reference to such term or provision
of the Investment Company 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
Investment Company Act. Specifically, the terms "vote of a majority of the
outstanding voting securities," "interested persons," "assignment," and
"affiliated persons," as used herein shall have the meanings assigned to them by
Section 2(a) of the Investment Company Act. In addition, where the effect of a
requirement of the Investment Company Act 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.






                           [SIGNATURE PAGE TO FOLLOW]




                                       9




      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first mentioned above.



XSHARES ADVISORS LLC                      BNY INVESTMENT ADVISORS


By: /s/ David W. Jaffin                   By: /s/ Denise Krisko
    ----------------------------------        ----------------------------------

     Name:  David W. Jaffin                   Name:   Denise Krisko

     Title: Chief Financial Officer           Title:  Managing Director


                                       10




                                   APPENDIX A
                                       TO
                             SUB-ADVISORY AGREEMENT




TDAX Independence 2010 Exchange-Traded Fund

TDAX Independence 2020 Exchange-Traded Fund

TDAX Independence 2030 Exchange-Traded Fund

TDAX Independence 2040 Exchange-Traded Fund

TDAX Independence In-Target Exchange-Traded Fund





Dated:  July 24, 2007








                                   APPENDIX B
                                       TO
                             SUB-ADVISORY AGREEMENT



Domestic Equity Funds: The Sub-Adviser shall be entitled to receive the fees
indicated below.

      o     10 basis points (0.10%) of the first $100 million in combined daily
            net assets of all domestic Equity Funds; and

      o     5 basis points (0.05%) of the combined daily net assets of all
            domestic Equity Funds in excess of $100 million.

There is a minimum annual investment management fee of $35,000 per Fund (the
"Minimum Annual Fee"). A domestic fund is defined by the Sub-Adviser as a fund
with less than 50% of its holdings and/or assets in non-U.S. markets. The
Sub-Adviser has decided to apply its Domestic Equity Funds' fee schedule to the
Funds. Funds with more than 50% of holdings and/or assets in non-U.S. markets
are global funds, and will be subject to a global fee schedule.



                                       12







                                                                  Exhibit (e)(1)


                             DISTRIBUTION AGREEMENT

         This  Distribution  Agreement (the  "Agreement")  made this 24th day of
July, 2007, by and between TDAX Funds, Inc., a Maryland Corporation (the "Fund")
having its principal  place of business at 420 Lexington  Avenue,  New York, New
York  10170,  and  ALPS   Distributors,   Inc.,  a  Colorado   corporation  (the
"Distributor")  having its principal  place of business at 1290 Broadway,  Suite
1100, Denver, CO 80203.

         WHEREAS,  the  Fund  is a  registered  open-end  management  investment
company organized as a series Fund offering a number of portfolios of securities
(each a "Portfolio" and collectively the "Portfolios"), each investing primarily
in equity securities  selected to reflect the performance of a particular market
index,   having  filed  with  the  Securities  and  Exchange   Commission   (the
"Commission") a registration  statement on Form N-1A under the Securities Act of
1933, as amended (the "1933 Act"),  and the  Investment  Company Act of 1940, as
amended (the "1940 Act");

         WHEREAS,  the Fund intends to create and redeem shares of common stock,
par value  $.0001 per Share (the  "Shares")  of each  Portfolio  on a continuous
basis at their net asset  value  only in  aggregations  constituting  a Creation
Unit, as such term is defined in the Registration Statement;

         WHEREAS,  the Shares of each  Portfolio  will be listed on the New York
Stock Exchange (the "NYSE") and traded under the symbols set forth in Exhibit A,
attached hereto and incorporated herein by reference;

         WHEREAS,  the Fund  desires  to retain  the  Distributor  to act as the
distributor  with respect to the issuance and  distribution of Creation Units of
Shares of each Fund,  hold itself  available  to receive and process  orders for
such  Creation  Units in the manner set forth in the Fund's  Prospectus,  and to
enter into arrangements with  broker-dealers who may solicit purchases of Shares
and with  broker-dealers  and others to provide  for  servicing  of  shareholder
accounts  and  for  distribution   assistance,   including   broker-dealer   and
shareholder support;

         WHEREAS,  the  Distributor  is a  registered  broker-dealer  under  the
Securities Exchange Act of 1934, as amended (the "1934 Act") and a member of the
National Association of Securities Dealers ("NASD"); and

         WHEREAS,  the  Distributor  desires to provide the  services  described
herein to the Fund.

         NOW,   THEREFORE,   in   consideration   of  the  mutual  promises  and
undertakings herein contained, the parties agree as follows:

1.       Appointment.   The  Fund  hereby   appoints  the   Distributor  as  the
distributor  for  Creation  Unit  aggregations  of Shares of each Fund listed in
Exhibit A hereto,  as may be amended by the  parties  from time to time,  on the
terms  and for the  period  set  forth  in this  Agreement  and  subject  to the
registration  requirements of the 1933 Act and of the laws governing the sale of
securities  in the various  states,  and the  Distributor  hereby  accepts  such
appointment and agrees to act in such




capacity hereunder.

2.       Definitions.  Wherever they are used herein,  the following  terms have
the following respective meanings:

         a. "1940 Act" means the  Investment  Company  Act of 1940 and the rules
and regulations thereunder as amended from time to time;

         b.  "Prospectus"  means the  Prospectus  and  Statement  of  Additional
Information  constituting parts of the Registration  Statement of the Fund under
the 1933 Act and the 1940 Act as such  Prospectus  and  Statement of  Additional
Information  may be amended or  supplemented  and filed with the Commission from
time to time;

         c.  "Registration  Statement"  means the  registration  statement  most
recently  filed from time to time by the Fund with the  Commission and effective
under the 1933 Act and the 1940 Act, as such  registration  statement is amended
by any amendments thereto at the time in effect;

         d. All  capitalized  terms used but not defined in this Agreement shall
have the meanings  ascribed to such terms in the Registration  Statement and the
Prospectus.

3.       Duties of the Distributor.

         (a) The Fund grants to the  Distributor the right to receive all orders
for purchases of Creation Units of each Fund from  Participating  Parties or DTC
Participants   which  have   executed  a  Participant   Agreement   ("Authorized
Participants")  and to transmit such orders to the Fund in  accordance  with the
Registration  Statement and Prospectus;  provided,  however, that nothing herein
shall  affect  or limit  the right  and  ability  of the Fund to accept  Deposit
Securities and related Cash Components  through or outside the Clearing Process,
and as  provided  in and in  accordance  with  the  Registration  Statement  and
Prospectus. The Fund acknowledges that the Distributor shall not be obligated to
accept any certain  number of orders for Creation Units and nothing herein shall
prevent the Distributor from entering into like  distribution  arrangements with
other investment companies.

         (b) The Distributor  agrees to act as agent of the Fund with respect to
the continuous  distribution of Creation Units of each Portfolio as set forth in
the Registration  Statement and in accordance with the provisions  thereof.  The
Distributor  further  agrees as follows:  (a) the  Distributor  shall enter into
Participant   Agreements   between  and  among  Authorized   Participants,   the
Distributor and the Transfer Agent in accordance with the Registration Statement
and Prospectus; (b) the Distributor shall generate and transmit confirmations of
Creation Unit purchase order  acceptances to the purchaser;  (c) the Distributor
shall deliver copies of the prospectus,  included in the Registration Statement,
to  purchasers  of such  Creation  Units  and  upon  request  the  Statement  of
Additional  Information;  and (d) the  Distributor  shall  maintain  telephonic,
facsimile  and/or  access  to  direct  computer  communications  links  with the
Transfer Agent.



         (c)  (i)  The  Distributor  agrees  to  use  all  reasonable   efforts,
consistent with its other business, to facilitate the purchase of Creation Units
through  Authorized  Participants in accordance with the procedures set forth in
the Prospectus and the Participant Agreement.

              (ii) The Distributor  shall, at its own expense,  execute selected
or soliciting  dealer  participant  agreements  ("Participant  Agreements") with
registered broker-dealers and other eligible entities providing for the purchase
of Creation Units of Shares of the Funds and related promotional activities,  in
the forms as approved by the Board of Directors of the Fund.  The Fund shall not
furnish  or cause to be  furnished  to any  person or  display  or  publish  any
information or materials relating to the Funds (including,  without  limitation,
promotional  materials and sales  literature,  advertisements,  press  releases,
announcements,  statements,  posters,  signs or other similar material),  except
such  information  and  materials  that have been  approved  in  writing  by the
Distributor.  Furthermore, the Distributor shall clear and file all advertising,
sales, marketing and promotional materials of the Funds with the NASD.

         (d) The  Distributor  agrees to  administer  the  Distribution  Plan on
behalf  of the Fund.  The  Distributor  shall,  at its own  expense,  set up and
maintain  a system of  recording  and  payments  for fees and  reimbursement  of
expenses   disseminated  pursuant  to  this  Agreement  and  any  other  related
agreements  under the Funds'  Rule 12b-1  Plans and shall,  pursuant to the 1940
Act,  report such payment  activity under the  Distribution  Plan to the Fund at
least quarterly.

         (e) The Distributor  shall provide  toll-free  lines, by way of the New
York Stock Exchange  [Index Share Product Hotline  (1-800-THE-NYSE)]  for direct
investor  and  shareholder  use  between  the hours of 9:00  a.m.  and 8:00 p.m.
Eastern  standard  time on each  day the New  York  Stock  Exchange  is open for
business,  with appropriate NASD licensed order taking and distribution services
staff.

         (f) All  activities  by the  Distributor  and its agents and  employees
which are  primarily  intended  to result in the sale of  Creation  Units  shall
comply with the Registration  Statement and Prospectus,  the instructions of the
Board of Directors of the Fund and all applicable  laws,  rules and  regulations
including,  without  limitation,  all  rules  and  regulations  made or  adopted
pursuant  to the  1940  Act  by the  Commission  or any  securities  association
registered under the 1934 Act, including the NASD and the NYSE.

         (g)  Except  as  otherwise  noted  in the  Registration  Statement  and
Prospectus,  the  offering  price for all  Creation  Units of Shares will be the
aggregate net asset value of the Shares per Creation Unit of the relevant  Fund,
as  determined  in the  manner  described  in  the  Registration  Statement  and
Prospectus.

         (h) If and whenever the  determination  of net asset value is suspended
and until such  suspension is  terminated,  no further orders for Creation Units
will be processed by the  Distributor  except such  unconditional  orders as may
have been placed with the Distributor before it had knowledge of the suspension.
In  addition,  the Fund  reserves the right to suspend  sales and  Distributor's
authority to process orders for Creation  Units on behalf of the Fund,  upon due
notice to the  Distributor,  if, in the judgment of the Fund,  it is in the best
interests of the Fund to do so.  Suspension will continue for such period as may
be determined by the Fund.





         (i)  The  Distributor  is  not  authorized  by the  Fund  to  give  any
information  or to make any  representations  other than those  contained in the
Registration  Statement or  Prospectus  or contained in  shareholder  reports or
other  material  that  may be  prepared  by or on  behalf  of the  Fund  for the
Distributor's use. The Distributor shall be entitled to rely on and shall not be
responsible  in any way  for  information  provided  to it by the  Fund  and its
respective  service  providers  and shall not be liable or  responsible  for the
errors and  omissions of such service  providers,  provided  that the  foregoing
shall not be construed to protect the  Distributor  against any liability to the
Fund or the Fund's  shareholders  to which the  Distributor  would  otherwise be
subject by reason of willful  misfeasance,  bad faith or gross negligence in the
performance  of its  duties  or by  reason  of  its  reckless  disregard  of its
obligations and duties under this Agreement.

         (j) The Board of  Directors  shall  approve the form of any  Soliciting
Dealer Agreement to be entered into by the Distributor.

         (k) At the  request  of the Fund,  the  Distributor  shall  enter  into
agreements in the form  specified by the Fund (each a  "Participant  Agreement")
with  participants  in the system for book-entry of The Depository  Fund Company
and the NSCC as described in the Prospectus.

         (l)  The  Distributor   shall  ensure  that  all  direct  requests  for
Prospectuses, Statements of Additional of Information and periodic fund reports,
as applicable,  are fulfilled.  In addition,  the  Distributor  shall arrange to
provide the NYSE (and any other  national stock exchange on which the Shares may
be listed)  with copies of  Prospectuses  to be provided  to  purchasers  in the
secondary market.  The Distributor will generally make it known in the brokerage
community  that  prospectuses  and  statements  of  additional  information  are
available,  including  by (i) advising the NYSE on behalf of its member firms of
the same, (ii) making such disclosure in all marketing and advertising materials
prepared  and/or  filed by the  Distributor  with  the  NASD,  and  (iii) as may
otherwise be required by the Commission.

         (m) The Distributor  agrees to make  available,  at the Fund's request,
one or more members of its staff to attend  Board  meetings of the Fund in order
to provide information with regard to the ongoing  distribution  process and for
such other purposes as may be requested by the Board of Directors of the Fund.

         (n) The Distributor shall review all sales and marketing  materials for
compliance  with  applicable  laws and  conditions of any  applicable  exemptive
order, and file such materials with the NASD when necessary or appropriate.  All
such  sales  and  marketing  materials  must be  approved,  in  writing,  by the
Distributor prior to use.

4.       Duties of the Fund.

         (a) The Fund agrees to issue  Creation Unit  aggregations  of Shares of
each Portfolio and to request The Depository Fund Company to record on its books
the ownership of such Shares in accordance with the book-entry system procedures
described in the  Prospectus  in such amounts as the  Distributor  has requested
through the Transfer  Agent in writing or other means of data  transmission,  as
promptly  as  practicable  after  receipt by the Fund of the  requisite  Deposit
Securities  and Cash  Component  (together with any fees) and acceptance of such
order,  upon the terms  described in the  Registration  Statement.  The Fund may
reject any order for  Creation  Units or stop all receipts of such orders at any
time  upon  reasonable  notice  to  the  Distributor, in




accordance with the provisions of the Prospectus.

         (b) The Fund agrees that it will take all action  necessary to register
an indefinite  number of Shares under the 1933 Act. The Fund will make available
to the  Distributor  such  number  of  copies  of its then  currently  effective
Prospectus as the Distributor may reasonably  request.  The Fund will furnish to
the  Distributor  copies  of all  information,  financial  statements  and other
papers,  which the Distributor may reasonably request for use in connection with
the distribution of Creation Units. The Fund shall keep the Distributor informed
of the  jurisdictions  in which Shares of the Fund are  authorized  for sale and
shall promptly  notify the  Distributor of any change in this  information.  The
Distributor shall not be liable for damages resulting from the sale of Shares in
authorized  jurisdictions where the Distributor had no information from the Fund
that such sale or sales were unauthorized at the time of such sale or sales.

         (c) The  Fund  represents  to the  Distributor  that  the  Registration
Statement and Prospectus  filed by the Fund with the Commission  with respect to
the Fund have been prepared in conformity with the requirements of the 1933 Act,
the 1940 Act and the rules and  regulations  of the Commission  thereunder.  The
Fund will notify the Distributor  promptly of any amendment to the  Registration
Statement or  supplement to the  Prospectus  and any stop order  suspending  the
effectiveness of the Registration Statement.

5.       Fees and Expenses.

         (a)  The  Fund  will,  with  respect  to  each  Portfolio,  pay  to the
Distributor all fees and expenses  pursuant to the terms of any Distribution and
Service Plan in effect for each respective Fund.

         (b) The Distributor will bear the following costs and expenses relating
to the  distribution  of  Creation  Units  of the  Portfolio:  (a) the  costs of
processing and maintaining records of creations of Creation Units; (b) the costs
of maintaining the records required of a broker-dealer registered under the 1934
Act; (c) the expenses of maintaining  its  registration  or  qualification  as a
dealer  or broker  under  federal  or state  laws;  and (d) all  other  expenses
incurred in  connection  with the  distribution  services  contemplated  herein,
except as specifically provided in this Agreement.

6.       Indemnification.

         (a) The Fund agrees to indemnify and hold harmless the  Distributor and
each of the  directors,  officers,  agents  and  employees  and any  person  who
controls the  Distributor  within the meaning of Section 15 of the 1933 Act (any
of the  Distributor,  their  officers,  agents,  employees and directors or such
control persons,  for purposes of this paragraph,  an "Indemnitee")  against any
loss,  liability,  claim,  damages or expense  (including the reasonable cost of
investigating  or  defending  any alleged  loss,  liability,  claim,  damages or
expense and reasonable  counsel fees incurred in connection  therewith)  arising
out of or based  upon the claim  that the  Registration  Statement,  Prospectus,
shareholder  reports or other  information  filed or made public by the Fund (as
from time to time  amended)  included an untrue  statement of a material fact or
omitted to state a material fact  required to be stated  therein or necessary in
order to make the  statements  therein  (and in the case of the  Prospectus,  in
light of the circumstances  under which they were made) not




misleading under the 1933 Act, or any other statute or the common law.  However,
the Fund does not agree to indemnify the  Distributor or hold it harmless to the
extent  that the  statement  or  omission  was  made in  reliance  upon,  and in
conformity  with  information  furnished  to the  Fund  by or on  behalf  of the
Distributor. The Fund will also not indemnify any Indemnitee with respect to any
untrue  statement or omission made in the  Registration  Statement or Prospectus
that is  subsequently  corrected in such  document  (or an amendment  thereof or
supplement  thereto)  if  a  copy  of  the  Prospectus  (or  such  amendment  or
supplement)  was not sent or  given  to the  person  asserting  any  such  loss,
liability,  claim,  damage or expense at or before the written  confirmation  to
such person in any case where such  delivery is required by the 1933 Act and the
Fund had notified the  Distributor  of the amendment or supplement  prior to the
sending  of the  confirmation.  In no case (i) is the  indemnity  of the Fund in
favor of any  Indemnitee  to be deemed to protect  the  Indemnitee  against  any
liability  to the  Fund  or its  shareholders  to  which  the  Indemnitee  would
otherwise  be  subject  by reason  of  willful  misfeasance,  bad faith or gross
negligence  in the  performance  of its  duties  or by  reason  of its  reckless
disregard of its  obligations  and duties under this  Agreement,  or (ii) is the
Fund to be liable under its indemnity agreement contained in this paragraph with
respect to any claim made against any  Indemnitee  unless the  Indemnitee  shall
have  notified the Fund in writing of the claim  within a reasonable  time after
the summons or other first written notification giving information of the nature
of the claim shall have been served upon Indemnitee (or after  Indemnitee  shall
have received notice of service on any designated  agent).  However,  failure to
notify the Fund of any claim shall not relieve the Fund from any liability which
it may have to any Indemnitee against whom such action is brought otherwise than
on account of its  indemnity  agreement  contained in this  paragraph.  The Fund
shall be entitled to participate at its own expense in the defense, or, if it so
elects, to assume the defense of any suit brought to enforce any claims,  but if
the Fund elects to assume the defense, the defense shall be conducted by counsel
chosen by it and  satisfactory  to  Indemnitee,  defendant or  defendants in the
suit.  In the event the Fund elects to assume the defense of any suit and retain
counsel,  Indemnitee,  defendant or defendants in the suit,  shall bear the fees
and expenses of any  additional  counsel  retained by them. If the Fund does not
elect to assume  the  defense of any suit,  it will  reimburse  the  Indemnitee,
defendant or defendants in the suit, for the reasonable fees and expenses of any
counsel retained by them. The Fund agrees to notify the Distributor  promptly of
the  commencement  of any  litigation  or  proceedings  against it or any of its
officers  or  Fundees  in  connection  with the  issuance  or sale of any of the
Creation Units or the Shares.

         (b) The Distributor  agrees to indemnify and hold harmless the Fund and
each of its  Directors  and officers and any person who controls the Fund within
the meaning of Section 15 of the 1933 Act (for purposes of this  paragraph,  the
Fund and each of its  Directors  and  officers and its  controlling  persons are
collectively  referred to as the "Fund Affiliates") against any loss, liability,
claim,  damages or expense  (including the reasonable cost of  investigating  or
defending any alleged loss, liability,  claim, damages or expense and reasonable
counsel fees  incurred in  connection  therewith)  which the Fund  Affiliate may
incur  under the 1933 Act or any other  statute or common  law,  but only to the
extent that such loss,  liability,  claim, damages or expense shall arise out of
or be based upon (i) the  allegation of any wrongful act of the  Distributor  or
any of its  employees  or  (ii)  allegation  that  the  Registration  Statement,
Prospectus, shareholder reports or other information filed or made public by the
Fund (as from time to time amended)  included an untrue  statement of a material
fact or omitted to state a material  fact  required to be stated or necessary in
order to make  the  statements  not  misleading,  insofar  as the  statement  or
omission was made in reliance upon, and in conformity with information furnished
to the Fund by or on behalf of the Distributor.  In no case (i) is the indemnity
of the  Distributor  in favor of any Fund




Affiliate to be deemed to protect any Fund  Affiliate  against any  liability to
the Fund or its security holders to which such Fund Affiliate would otherwise be
subject by reason of willful  misfeasance,  bad faith or gross negligence in the
performance  of its  duties  or by  reason  of  its  reckless  disregard  of its
obligations  and duties under this  Agreement,  or (ii) is the Distributor to be
liable under its indemnity agreement contained in this paragraph with respect to
any claim made against any Fund Affiliate  unless the Fund Affiliate  shall have
notified the  Distributor in writing of the claim within a reasonable time after
the summons or the first written  notification  giving information of the nature
of the claim shall have been served upon the Fund  Affiliate  (or after the Fund
Affiliate  shall  have  received  notice of service  on any  designated  agent).
However,  failure to notify the  Distributor  of any claim shall not relieve the
Distributor  from any liability which it may have to the Fund Affiliate  against
whom the action is brought otherwise than on account of its indemnity  agreement
contained in this paragraph. The Distributor shall be entitled to participate at
its own expense in the defense or, if it so elects, to assume the defense of any
suit brought to enforce the claim,  but if the Distributor  elects to assume the
defense, the defense shall be conducted by counsel chosen by it and satisfactory
to the Fund,  its officers and Board and to any  controlling  person or persons,
defendant or  defendants in the suit.  In the event that  Distributor  elects to
assume  the  defense  of any suit and retain  counsel,  the Fund or  controlling
person or persons,  defendant or defendants in the suit, shall bear the fees and
expenses of any additional counsel retained by them. If the Distributor does not
elect to  assume  the  defense  of any suit,  it will  reimburse  the Fund,  its
officers and Board or controlling person or persons,  defendant or defendants in
the suit, for the reasonable fees and expenses of any counsel  retained by them.
The  Distributor  agrees to notify the Fund promptly of the  commencement of any
litigation or proceedings against it in connection with the issuance and sale of
any of the shares.

         (c) No indemnified party shall settle any claim against it for which it
intends to seek  indemnification from the indemnifying party, under the terms of
section 6(a) or 6(b) above, without the prior written notice to and consent from
the indemnifying  party,  which consent shall not be unreasonably  withheld.  No
indemnified or  indemnifying  party shall settle any claim unless the settlement
contains a full release of liability  with respect to the other party in respect
of such action. This section 6 shall survive the termination of this Agreement.

7.       Representations.

         (a)  The  Distributor  represents  and  warrants  that  (i) it is  duly
organized  as a Colorado  corporation  and is and at all times will  remain duly
authorized and licensed to carry out its services as contemplated  herein;  (ii)
the execution,  delivery and  performance of this Agreement are within its power
and have been duly  authorized by all necessary  action;  and (iii) its entering
into this  Agreement or  providing  the  services  contemplated  hereby does not
conflict  with or  constitute a default or require a consent  under or breach of
any provision of any agreement or document to which the  Distributor  is a party
or by which it is bound and (iv) it is registered as a  broker-dealer  under the
1934 Act and is a member of the NASD.

         (b) The  Distributor  represents  and warrants that it will maintain an
anti-money  laundering  program in compliance  with Title III of the Uniting and
Strengthening  America by Providing  Appropriate Tools Required to Intercept and
Obstruct  Terrorism Act of 2001 ("USA Patriot Act") and all applicable  laws and
regulations  promulgated  thereunder.  The Distributor will supply the fund with
copies of the Distributor's  anti-money  laundering  policy and




procedures, and such other relevant certifications and representations regarding
such policy and procedures as the Fund may reasonably request from time to time.

         (c) The  Distributor  represents and warrants that it has procedures in
place  reasonably  designed  to  protect  the  privacy  of  non-public  personal
consumer/customer  financial  information  to the extent  required by applicable
law, rule and regulation.

         (d) The Fund represents and warrants that (i) it is duly organized as a
Maryland  Corporation  and is and at all times will  remain duly  authorized  to
carry out its  obligations as contemplated  herein;  (ii) it is registered as an
investment  company  under  the 1940  Act;  (iii) the  execution,  delivery  and
performance of this Agreement are within its power and have been duly authorized
by all  necessary  action;  and (iv) its entering into this  Agreement  does not
conflict  with or  constitute a default or require a consent  under or breach of
any  provision  of any  agreement or document to which the Fund is a party or by
which it is bound.

8.       Duration, Termination and Amendment.

         (a) This  Agreement  shall be effective  on July 24,  2007,  and unless
terminated as provided  herein,  shall continue for two years from its effective
date, and thereafter  from year to year,  provided such  continuance is approved
annually by the vote of a majority of the Board of Directors, and by the vote of
those Directors who are not "interested  persons" of the Fund (the  "Independent
Directors")  and if a plan under Rule 12b-1 under the 1940 Act is in effect,  by
the vote of those Directors who are not "interested persons" of the Fund and who
are not parties to such Plan or this Agreement and have no financial interest in
the operation of such Plan or in any  agreements  related to such Plan,  cast in
person at a meeting  called  for the  purpose  of voting on the  approval.  This
Agreement may be terminated at any time, without the payment of any penalty,  as
to each Portfolio (i) by vote of a majority of the Independent Directors or (ii)
by vote of a majority  (as  defined in the 1940 Act) of the  outstanding  voting
securities of the Fund, on at least sixty (60) days prior written  notice to the
Distributor.  In addition,  this  Agreement may be terminated at any time by the
Distributor upon at least sixty (60) days prior written notice to the Fund. This
Agreement shall automatically terminate in the event of its assignment.  As used
in this paragraph,  the terms  "assignment" and "interested  persons" shall have
the respective meanings specified in the 1940 Act.

         (b)  During  such  period  as  the  Distributor  receives  compensation
pursuant to the 12b-1 Plans, and this Agreement constitutes a 12b-1 Plan related
agreement,  (i) any material  amendment to this Agreement  requires the approval
provided for in paragraph (a) with respect to annual renewals of this Agreement,
and (ii) any  amendment  that  materially  increases  the amount to be spent for
distribution  services  requires the additional  approval of the majority of the
Fund's  outstanding  voting  securities  (as  defined  in the 1940  Act) of each
affected Fund.

         (c) No provision of this Agreement may be changed,  waived,  discharged
or terminated  except by an  instrument  in writing  signed by the party against
which an enforcement of the change, waiver, discharge or termination is sought.

9.       Notice.  Any notice or other  communication  authorized  or required by
this  Agreement  to be given to either  party  shall be in writing and deemed to
have been given when delivered in person or by confirmed facsimile, or posted by
certified  mail,  return receipt  requested,  to the




following  address  (or such  other  address  as a party may  specify by written
notice to the other): if to the Distributor:  ALPS Distributors,  Inc., P.O. Box
328, Denver, CO 80201,  Attn.:  General Counsel,  if to the Fund:. 420 Lexington
Avenue, New York, New York 10170.

10.      Choice of Law.  This  Agreement  shall be governed by, and construed in
accordance with, the laws of the state of Colorado, without giving effect to the
choice of laws provisions thereof.

11.      Counterparties.   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.

12.      Severability. If any provisions of this Agreement shall be held or made
invalid,  in whole or in part, then the other provisions of this Agreement shall
remain in force.  Invalid  provisions shall, in accordance with this Agreement's
intent and  purpose,  be  amended,  to the  extent  legally  possible,  by valid
provisions  in  order  to  effectuate  the  intended   results  of  the  invalid
provisions.

13.      Insurance.  The  Distributor  agrees  to  maintain  fidelity  bond  and
liability  insurance  coverages which are, in scope and amount,  consistent with
coverages  customary  for  distribution  activities  relating  to the Fund.  The
Distributor  shall  notify  the Fund upon  receipt  of any  notice of  material,
adverse  change in the  terms or  provisions  of its  insurance  coverage.  Such
notification  shall  include  the  date of  change  and the  reason  or  reasons
therefor.  The Distributor  shall notify the Fund of any material claims against
it, whether or not covered by insurance,  and shall notify the Fund from time to
time as may be appropriate of the total outstanding  claims made by it under its
insurance coverage.

14.      Segregation  of Fees and  Expenses.  Amounts  paid by each  Fund to the
Distributor  under its 12b-1 Plan either for  distribution  related  services or
shareholder services shall not be used to pay for the distribution of Shares of,
or shareholder  servicing in respect of, any other Fund. However, fees under the
12b-1 Plan  attributable  to the Fund as a whole shall be allocated to each Fund
according  to the  method  adopted  by  the  Fund's  Board  of  Directors.  Fees
attributable  to the Fund as a whole shall include any amounts payable under the
12b-1  Plans  to the  Distributor  for  its  services  rendered  hereunder.  The
Distributor's  allocation  of such 12b-1 Plan fees shall be subject to review by
the Fund's Board of Directors.

15.      Confidentiality. During the term of this Agreement, the Distributor and
the Fund may have access to confidential information relating to such matters as
either party's business, trade secrets, systems, procedures,  manuals, products,
contracts,  personnel,  and clients.  As used in this  Agreement,  "Confidential
Information" means information belonging to one of the parties which is of value
to such party and the disclosure of which could result in a competitive or other
disadvantage  to  such  party.   Confidential   Information  includes,   without
limitation,   financial  information,   proposal  and  presentations,   reports,
forecasts,  inventions,  improvements  and other  intellectual  property;  trade
secrets;  know-how;  designs,  processes or formulae;  software; market or sales
information  or  plans;  customer  lists;  and  business  plans,  prospects  and
opportunities  (such as possible  acquisitions  or dispositions of businesses or
facilities).  Confidential  Information includes information developed by either
party  in  the  course  of  engaging  in the  activities  provided  for in  this
Agreement,  unless:  (i) the  information  is or becomes  publicly known through
lawful  means;  (ii) the  information  is disclosed to the other party without a




confidential   restriction  by  a  third  party  who  rightfully  possesses  the
information  and did not obtain it, either  directly or indirectly,  from one of
the  parties,  as the  case  may  be,  or any of  their  respective  principals,
employees,  affiliated persons, or affiliated  entities.  The parties understand
and agree that all Confidential  Information  shall be kept  confidential by the
other both  during and after the term of this  Agreement.  The  parties  further
agree that they will not, without the prior written approval by the other party,
disclose such Confidential Information,  or use such Confidential Information in
any way,  either  during the term of this  Agreement or at any time  thereafter,
except as  required in the course of this  Agreement  and as proved by the other
party or as required by law.

       IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to be
executed  by their  officers  designated  below as of the date  first  set forth
above.




                                  TDAX FUNDS, INC.

                                  By: /s/ David W. Jaffin
                                     -------------------------------------
                                  Title:Chief Financial Officer

                                  ALPS DISTRIBUTORS, INC.

                                  By: /s/ Thomas A. Carter
                                     -------------------------------------
                                  Name: Thomas A. Carter
                                  Title: Managing Director






                                    EXHIBIT A
                                    ---------

                                TDAX FUNDS, INC.


Portfolio
---------

TDAX Independence 2010 Exchange-Traded Fund
TDAX Independence 2020 Exchange-Traded Fund
TDAX Independence 2030 Exchange-Traded Fund
TDAX Independence 2040 Exchange-Traded Fund
TDAX Independence In-Target Exchange Traded Fund






                                                                  Exhibit (e)(2)


                        AUTHORIZED PARTICIPANT AGREEMENT
                                       FOR
                                TDAX FUNDS, INC.

         This Authorized Participant Agreement (the "Agreement") is entered into
by   and   between   ALPS   Distributor,    Inc.   (the    "Distributor")    and
__________________________________ (the "Authorized Participant" or "AP") and is
subject to  acceptance by The Bank of New York ("BNY ETF  Administrator"  or the
"Transfer Agent").  The Transfer Agent serves as the transfer agent for the TDAX
Funds,  Inc.  (the  "Company"  ) and is an Index  Receipt  Agent as that term is
defined in the rules of the National Securities Clearing  Corporation  ("NSCC").
The Distributor,  the Transfer Agent and the Authorized Participant  acknowledge
and agree that the Company shall be a third party beneficiary of this Agreement,
and shall receive the benefits  contemplated  by this  Agreement,  to the extent
specified  herein.  The  Distributor  has been  retained to provide  services as
principal  underwriter  of the Company  acting on an agency basis in  connection
with the sale and  distribution  of shares  of  beneficial  interest,  par value
$.0001 per share  (sometimes  referred to as "Shares"),  of each of the separate
investment  portfolios  of  the  Company  (each  such  portfolio  a  "Fund"  and
collectively, the "Funds") named on Annex I to this Agreement.

         As specified in the  Company's  prospectus  and statement of additional
information  incorporated therein  (collectively,  the "Prospectus") included as
part of its registration  statement,  as amended,  on Form N-1A (No.  811-22001)
("Registration  Statement"),  the  Shares  of any Fund  offered  thereby  may be
purchased  or redeemed  only in  aggregations  of a  specified  number of Shares
referred to therein and herein as a "Creation  Unit." All  references  to "cash"
shall refer to US Dollars ("USD").  The number of Shares constituting a Creation
Unit of each Fund is set forth in the  Prospectus.  Creation Units of Shares may
be purchased only by or through an Authorized  Participant that has entered into
an Authorized  Participant  Agreement with the Company and the Distributor.  The
Prospectus  provides that Creation Units  generally will be sold in exchange for
an in-kind deposit of a designated  portfolio of equity securities (the "Deposit
Securities")  and an amount of cash computed as described in the Prospectus (the
"Cash  Component"),  plus a  purchase  "Transaction  Fee"  as  described  in the
Prospectus,  delivered to the Company by the Authorized  Participant for its own
account or acting on behalf of another party.  Together,  the Deposit Securities
and the Cash Requirement constitute the "Creation Deposit," which represents the
minimum initial and subsequent  investment  amount for Shares of any Fund of the
Company.  References to the Prospectus are to the then current  Prospectus as it
may be  supplemented  or  amended  from  time to  time.  Capitalized  terms  not
otherwise defined herein are used herein as defined in the Prospectus.

         This  Agreement  is  intended  to set forth  certain  premises  and the
procedures  by which the  Authorized  Participant  may  purchase  and/or  redeem
Creation  Units of Shares (i)  through the  Continuous  Net  Settlement  ("CNS")
clearing  processes  of NSCC as such  processes  have  been  enhanced  to effect
purchases and  redemptions of Creation  Units,  such processes being referred to
herein as the "CNS Clearing  Process," or (ii) outside the CNS Clearing  Process
(i.e.,  through the manual process of The Depository  Trust Company ("DTC") (the
"DTC Process").  The procedures for processing an order to purchase Shares (each
a "Purchase  Order") and an order to redeem Shares (each a  "Redemption  Order")
are described in the Company's Prospectus and in Annex II to this Agreement. All
Purchase and Redemption Orders must be made pursuant to the procedures set forth
in the  Prospectus  and Annex II hereto,  as each may be amended by the  Company
from time to time. An Authorized Participant may not place a


                                                                               1


                                                                  Exhibit (e)(2)

Purchase Order before the fifth (5th) Business Day (as defined below)  following
execution and delivery to the Distributor of this Agreement and  notification by
the  Distributor  of  the  Authorized   Participant's   status.   An  Authorized
Participant may not cancel a Purchase Order or a Redemption Order after an order
is placed by the Authorized Participant.

      The parties hereto in consideration of the premises and of the mutual
                  agreements contained herein agree as follows:

1. STATUS OF AUTHORIZED PARTICIPANT.

         (a)  The  Authorized  Participant  hereby  represents,   covenants  and
warrants that with respect to Purchase  Orders or Redemption  Orders of Creation
Units of Shares of any Fund (i) through the CNS Clearing Process, it is a member
of NSCC and an Authorized  Participant  in the CNS System of NSCC (as defined in
the Fund's  Prospectus,  a "Participating  Party"),  and/or (ii) outside the CNS
Clearing Process,  it is a DTC Participant (as defined in the Fund's Prospectus,
a "DTC  Participant").  The Authorized  Participant may place Purchase Orders or
Redemption  Orders for Creation Units either through the CNS Clearing Process or
outside the CNS Clearing  Process,  subject to the  procedures  for purchase and
redemption  set  forth in this  Agreement,  the  Prospectus  and Annex II hereto
("Execution  of Orders").  Any change in the foregoing  status of the Authorized
Participant shall terminate this Agreement and the Authorized  Participant shall
give prompt  written  notice to the  Distributor,  the Company and the  Transfer
Agent of such change.

         (b) The Authorized  Participant hereby represents and warrants that it,
unless Section 1(c) is applicable,  (i) is registered as a  broker-dealer  under
the Securities  Exchange Act of 1934, as amended,  (ii) is qualified to act as a
broker  or  dealer  in the  states  or other  jurisdictions  where it  transacts
business,  and (iii) is a member in good standing of the National Association of
Securities  Dealers,  Inc. (the "NASD"),  and the Authorized  Participant agrees
that it will maintain such registrations, qualifications, and membership in good
standing and in full force and effect throughout the term of this Agreement. The
Authorized  Participant  agrees  to comply  with all  applicable  United  States
federal laws, the laws of the states or other jurisdictions  concerned,  and the
rules and regulations promulgated thereunder and with the Constitution,  By-Laws
and Conduct Rules of the NASD,  and that it will not offer or sell Shares of any
Fund of the Company in any state or jurisdiction  where they may not lawfully be
offered and/or sold.

         (c) If the Authorized  Participant is offering or selling Shares of any
Fund of the Company in jurisdictions outside the several states, territories and
possessions  of the United  States  ("US") and is not  otherwise  required to be
registered,  qualified,  or a  member  of the  NASD  as  set  forth  above,  the
Authorized Participant nevertheless agrees (i) to observe the applicable laws of
the  jurisdiction  in which such offer and/or sale is made,  (ii) to comply with
the full disclosure  requirements of the Securities Act of 1933, as amended (the
"1933 Act") and the regulations  promulgated thereunder and (iii) to conduct its
business in accordance with the spirit of the NASD Conduct Rules.

         (d) The Authorized Participant represents, covenants and warrants that
it has established and presently maintains an anti-money laundering program (the
"Program") reasonably designed to prevent the Authorized Participant from being
used as a conduit for money laundering or other illicit purposes or the
financing of terrorist activities, and is in compliance with the Program and all
anti-money laundering laws, regulations and rules now or


                                                                               2


                                                                  Exhibit (e)(2)

hereafter in effect that are applicable to it, including, without limitation,
the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (the "USA PATRIOT ACT").

         (e) The Authorized  Participant  understands and acknowledges  that the
method by which  Creation  Units of Shares  will be created and traded may raise
certain  issues under  applicable  securities  laws.  For  example,  because new
Creation  Units of Shares  may be issued  and sold by the  Company on an ongoing
basis, at any point a "distribution,"  as such term is used in the 1933 Act, may
be occurring.  The Authorized Participant understands and acknowledges that some
activities on its part, depending on the circumstances,  may result in its being
deemed a  participant  in a  distribution  in a manner  which could  render it a
statutory  underwriter  and subject it to the prospectus  delivery and liability
provisions  of the 1933  Act.  The  Authorized  Participant  should  review  the
"Continuous  Offering"  section of the SAI and  consult  with its own counsel in
connection  with  entering  into this  Agreement  and placing an Order  (defined
below).  The Authorized  Participant  also  understands  and  acknowledges  that
dealers who are not  "underwriters"  but are effecting  transactions  in Shares,
whether  or not  participating  in the  distribution  of Shares,  are  generally
required to deliver a prospectus.

         (f) The Authorized  Participant  has the capability to send and receive
communications  via  authenticated  telecommunication  facility  to and from the
Distributor,  the Custodian,  and the Authorized  Participant's  custodian.  The
Authorized  Participant shall confirm such capability to the satisfaction of the
Distributor  and the Custodian prior to placing its first Order with the BNY ETF
Administrator (whether it is a Purchase Order or a Redemption Order).

2. EXECUTION OF PURCHASE ORDERS AND REDEMPTION ORDERS.

         (a)  All  Purchase  Orders  or  Redemption  Orders  shall  be  made  in
accordance  with the terms of the  Prospectus  and the  procedures  described in
Annex II hereto.  Each party hereto agrees to comply with the provisions of such
documents to the extent  applicable to it. It is contemplated that the telephone
lines used by the BNY ETF  Administrator of the Transfer Agent will be recorded,
and the  Authorized  Participant  hereby  consents to the recording of all calls
with  the BNY ETF  Administrator.  The  Company  reserves  the  right  to  issue
additional or other procedures relating to the manner of purchasing or redeeming
Creation  Units  and the  Authorized  Participant  agrees  to  comply  with such
procedures as may be issued from time to time,  including but not limited to the
Cash Collateral Settlement Procedures that are referenced in Annex II hereto.

         (b) The  Authorized  Participant  acknowledges  and agrees on behalf of
itself and any party for which it is acting (whether as a customer or otherwise)
that  delivery of a Purchase  Order or  Redemption  Order shall be  irrevocable,
provided that the Company and the Distributor on behalf of the Company  reserves
the right to reject any Purchase  Order until the trade is released as "good" as
described  in Annex II hereto  and any  Redemption  Order that is not in "proper
form" as defined in the Prospectus.

         (c) With respect to any Redemption  Order,  the Authorized  Participant
also  acknowledges  and agrees on behalf of itself and any party for which it is
acting  (whether  as a  customer  or  otherwise)  to return to the  Company  any
dividend,  distribution or other corporate action paid to it or to the party for
which it is acting in respect of any Deposit Security that is transferred to the
Authorized  Participant  or any party for which it is acting that,  based on the


                                                                               3


                                                                  Exhibit (e)(2)


valuation  of such Deposit  Security at the time of  transfer,  should have been
paid to the  Company.  With  respect to any  Redemption  Order,  the  Authorized
Participant  also  acknowledges and agrees on behalf of itself and any party for
which it is acting  (whether  as a customer  or  otherwise)  that the Company is
entitled to reduce the amount of money or other  proceeds due to the  Authorized
Participant  or any party  for  which it is  acting  by an  amount  equal to any
dividend,  distribution  or other  corporate  action  to be paid to it or to the
party  for  which it is  acting  in  respect  of any  Deposit  Security  that is
transferred  to the  Authorized  Participant or any party for which it is acting
that,  based on the valuation of such Deposit  Security at the time of transfer,
should be paid to the Fund.  With  respect to any Purchase  Order,  the Transfer
Agent,  on  behalf  of the  Company,  acknowledges  and  agrees to return to the
Authorized  Participant  or any  party  for  which it is  acting  any  dividend,
distribution  or other  corporate  action  paid to the Company in respect of any
Deposit Security that is transferred to the Company that, based on the valuation
of such Deposit  Security at the time of transfer,  should have been paid to the
Authorized Participant or any party for which it is acting.

3.   NSCC.

         Solely with respect to Purchase  Orders or Redemption  Orders  effected
through the CNS Clearing Process, the Authorized Participant, as a Participating
Party, hereby authorizes the Transfer Agent to transmit to the NSCC on behalf of
the Authorized  Participant such instructions,  including amounts of the Deposit
Securities and Cash Component as are necessary, consistent with the instructions
issued by the Authorized Participant to a BNY ETF Administrator.  The Authorized
Participant  agrees to be bound by the terms of such instructions  issued by the
Transfer Agent and reported to NSCC as though such  instructions  were issued by
the Authorized Participant directly to NSCC.

4. PROSPECTUS, MARKETING MATERIALS AND REPRESENTATIONS.

         (a) The Distributor will provide to the Authorized  Participant  copies
of the then  current  Prospectus  and any printed  supplemental  information  in
reasonable  quantities upon request.  The Distributor  represents,  warrants and
agrees  that  it  will  notify  the  Authorized   Participant  when  a  revised,
supplemented  or amended  Prospectus  for any Fund is  available  and deliver or
otherwise make available to the Authorized  Participant  copies of such revised,
supplemented or amended Prospectus at such time and in such numbers as to enable
the Authorized  Participant to comply with any obligation it may have to deliver
such  Prospectus  to  customers.   The  Distributor   will  make  such  revised,
supplemented or amended  Prospectus  available to the Authorized  Participant no
later than its effective date. The Distributor  shall be deemed to have complied
with this Section 4 when the Authorized  Participant  has received such revised,
supplemented  or amended  prospectus  by email at [insert  e-mail  address],  in
printable  form,  with such  number of hard copies as may be agreed from time to
time by the parties promptly thereafter.

         (b) The Distributor  represents and warrants that (i) the  Registration
Statement and the Prospectus contained therein conforms in all material respects
to the  requirements of the Securities Act of 1933 ("the 1933 Act"), as amended,
and the rules and  regulations of the Securities and Exchange  Commission  ("the
SEC") thereunder and do not and will not, as of the applicable effective date as
to the Registration Statement and any amendment thereto and as of the applicable
filing  date as to the  Prospectus  and any  amendment  or  supplement  thereto,
contain an untrue  statement of a material fact or omit to state a material fact
required to be


                                                                               4


                                                                  Exhibit (e)(2)

stated therein or necessary to make the statements therein not misleading;  (ii)
the sale and distribution of the Shares as contemplated herein will not conflict
with or result in a breach or  violation  of any  statute or any order,  rule or
regulation of any court or governmental  agency or body having jurisdiction over
the  Company,  any Fund or the  Distributor;  and  (iii) no  consent,  approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the issuance and sale of the Shares,
except the registration under the 1933 Act of the Shares.

         (c) The Authorized Participant represents,  warrants and agrees that it
will not make any  representations  concerning Shares other than those contained
in the  Company's  then current  Prospectus or in any  promotional  materials or
sales literature furnished to the Authorized Participant by the Distributor. The
Authorized  Participant  agrees not to furnish or cause to be  furnished  to any
person or display or publish any  information  or  materials  relating to Shares
(including,  without  limitation,  promotional  materials and sales  literature,
advertisements,  press releases,  announcements,  statements,  posters, signs or
other  similar  materials),  except such  information  and  materials  as may be
furnished  to the  Authorized  Participant  by the  Distributor  and such  other
information and materials as may be approved in writing by the Distributor.  The
Authorized Participant understands that neither the Company nor any of its Funds
will be advertised or marketed as an open-end  investment  company,  (i.e., as a
mutual  fund),  which offers  redeemable  securities,  and that any  advertising
materials will prominently disclose that the Shares are not redeemable shares of
the Company.  In  addition,  the  Authorized  Participant  understands  that any
advertising  material  that  addresses  redemptions  of  Shares,  including  the
Prospectus,  will  disclose  that the  owners of Shares may  acquire  Shares and
tender Shares for redemption to the Company in whole Creation Units only.

         (d)  Notwithstanding  the  foregoing,  the Authorized  Participant  may
without the written  approval of the  Distributor  prepare and  circulate in the
regular  course of its  business  research  reports  that  include  information,
opinions or  recommendations  relating  to Shares (i) for public  dissemination,
provided that such research  reports compare the relative merits and benefits of
Shares with other products and are not used for purposes of marketing Shares and
(ii) for internal use by the Authorized Participant.

5. TITLE TO SECURITIES; RESTRICTED SHARES.

         The Authorized Participant represents on behalf of itself and any party
for which it acts that upon delivery of a portfolio of Deposit Securities to the
Custodian  in  accordance  with the terms of the  Prospectus,  the Company  will
acquire good and unencumbered  title to such  securities,  free and clear of all
liens,  restrictions,  charges and  encumbrances  and not subject to any adverse
claims, including, without limitation, any restriction upon the sale or transfer
of such securities  imposed by (i) any agreement or arrangement  entered into by
the  Authorized  Participant  or any party for which it is acting in  connection
with a Purchase Order or (ii) any provision of the 1933 Act, and any regulations
thereunder (except that portfolio  securities of issuers other than U.S. issuers
shall not be required to have been registered  under the 1933 Act if exempt from
such  registration),  or of the  applicable  laws or  regulations  of any  other
applicable jurisdiction and (iii) no such securities are "restricted securities"
as such term is used in Rule 144(a)(3)(i) promulgated under the 1933 Act.

6. CASH COMPONENT AND FEES.


                                                                               5


                                                                  Exhibit (e)(2)


         The  Authorized  Participant  hereby agrees that as between the Company
and itself or any party for which it acts in  connection  with a Purchase  Order
for any Fund,  it will make  available  in same day funds for each  purchase  of
Shares an  amount of cash  sufficient  to pay the Cash  Component  and any other
amounts  of cash due to the  Company  in  connection  with the  purchase  of any
Creation Unit of Shares (including the purchase  Transaction Fee for in-kind and
cash purchases and the additional  variable charge for cash purchases  (when, in
the sole discretion of the Company, cash purchases are available or specified as
described in the  Prospectus))  (the "Cash  Amount") which shall be made through
DTC to an account  maintained by the Custodian and shall be provided in same day
or immediately  available  funds on or before the settlement  date in accordance
with the Company's  Prospectus  ("Contractual  Settlement Date"). The Authorized
Participant hereby agrees to ensure that the Cash Amount will be received by the
Company on or before the Contractual  Settlement  Date, and in the event payment
of such Cash Amount has not been made by such  Contractual  Settlement Date, the
Authorized Participant agrees on behalf of itself or any party for which it acts
in connection with a Purchase Order to pay the full cash amount,  plus interest,
computed at such reasonable rate as may be specified by the Company from time to
time.  The  Authorized  Participant  may  require  its  customer to enter into a
written agreement with the Authorized Participant with respect to such matters.

7.  ROLE OF AUTHORIZED PARTICIPANT.

         (a) The  Authorized  Participant  acknowledges  and agrees that for all
purposes of this Agreement,  the Authorized  Participant will be deemed to be an
independent  contractor,  and will  have no  authority  to act as agent  for the
Company,  any Fund,  the  Distributor,  the  Custodian,  in any matter or in any
respect.  The  Authorized  Participant  agrees to make itself and its  employees
available,  upon  request,  during  normal  business  hours to consult  with the
Company,  the  Distributor,  the  Custodian,  or  the  Authorized  Participant's
custodian  or their  designees  concerning  the  performance  of the  Authorized
Participant's responsibilities under this Agreement.

         (b) In executing this Agreement,  the Authorized  Participant agrees in
connection  with any purchase or redemption  transactions in which it acts for a
customer or for any other Authorized Participant or indirect participant, or any
other shareholder in an underlying shares account ("Beneficial  Owner"), that it
shall  extend to any such party all of the rights,  and shall be bound by all of
the  obligations,  of a DTC Participant in addition to any  obligations  that it
undertakes hereunder or in accordance with the Prospectus.

         (c) The Authorized  Participant agrees to maintain records of all sales
of Shares  made by or through it and to  furnish  copies of such  records to the
Company or the Distributor upon the request of the Company or the Distributor.

8. AUTHORIZED PERSONS OF THE AUTHORIZED PARTICIPANT.

         Concurrently with the execution of this Agreement and from time to time
thereafter as may be requested by the Company or the Distributor, the Authorized
Participant shall deliver to the Distributor and the Company, with copies to the
Transfer Agent at the address  specified below, duly certified as appropriate by
its  Secretary  or other  duly  authorized  official,  a  certificate  in a form
approved  by the Company  (see Annex III to this  Agreement)  setting  forth the
names and signatures of all persons authorized to give instructions  relating to
any activity


                                                                               6


                                                                  Exhibit (e)(2)

contemplated hereby or any other notice, request or instruction on behalf of the
Authorized   Participant  (each  such  person  an  "Authorized  Person").   Such
certificate  may be accepted and relied upon by the  Distributor and the Company
as conclusive evidence of the facts set forth therein and shall be considered to
be in full force and effect until delivery to the Distributor and the Company of
a superseding certificate in a form approved by the Company bearing a subsequent
date. Upon the termination or revocation of authority of such Authorized  Person
by the Authorized  Participant,  the Authorized Participant shall give immediate
written notice of such fact to the  Distributor  and the Company and such notice
shall be effective  upon receipt by both the  Distributor  and the Company.  The
Distributor  shall  issue  to each  Authorized  Participant  a  unique  personal
identification number ("PIN Number") by which such Authorized  Participant shall
be identified and instructions  issued by the Authorized  Participant  hereunder
shall be  authenticated.  The PIN  Number  shall be kept  confidential  and only
provided to Authorized Persons. If after issuance,  an Authorized  Participant's
PIN  Number is  changed,  the new PIN Number  will  become  effective  on a date
mutually agreed upon by the Authorized Participant and the Distributor.

9.  REDEMPTION.

         The  Authorized  Participant  understands  and agrees  that  Redemption
Orders may be submitted only on days that the US stock exchange where the Shares
are principally listed (as specified in the Prospectus) (the "Listing Exchange")
is open for trading or business.

         (a) The Authorized Participant represents and warrants that it will not
attempt to place a Redemption  Order for the purpose of  redeeming  any Creation
Unit of Shares of any Fund unless it first  ascertains  that it or its customer,
as the case may be,  owns  outright  or has full legal  authority  and legal and
beneficial right to tender for redemption the requisite number of Creation Units
of Shares of the relevant Fund to be redeemed and to the entire  proceeds of the
redemption and that such Shares have not been loaned or pledged to another party
and are not the subject of a repurchase agreement,  securities lending agreement
or any other  arrangement that would preclude the delivery of such Shares to the
Transfer Agent in accordance with the Prospectus or as otherwise required by the
Company. The Authorized  Participant  understands that Shares of any Fund may be
redeemed  only when one or more Creation  Units of Shares of a Beneficial  Owner
are held in the account of a single Authorized Participant.

          (b) In the  case  of a  resident  Australian  or  New  Zealand  holder
notwithstanding the foregoing, the Authorized Participant understands and agrees
that such  holder is only  entitled  to  receive  cash  upon its  redemption  of
Creation  Units of Shares.  In the Redemption  Order the Authorized  Participant
will be  required  to confirm  that an in-kind  redemption  request has not been
submitted on behalf of a beneficial owner who is an Australian resident.

10. BENEFICIAL OWNERSHIP.
         (a)  The  Authorized   Participant   represents  and  warrants  to  the
Distributor and the Company that (based upon the number of outstanding Shares of
each such Fund made publicly available by the Company) it does not, and will not
in the future,  hold for the account of any single Beneficial Owner of Shares of
the relevant  Fund,  eighty  percent (80%) or more of the currently  outstanding
Shares  of such  relevant  Fund,  so as to cause the Fund to have a basis in the
portfolio securities deposited with the Fund with respect to such Fund different
from the market value of such portfolio  securities on the date of such deposit,
pursuant to section 351 of the Internal  Revenue Code of 1986,  as amended.  The
Authorized  Participant  agrees that the


                                                                               7


                                                                  Exhibit (e)(2)

confirmation  relating to any order for one or more Creation  Units of Shares of
any Fund shall state as follows:

        "Purchaser  represents and warrants that,  after giving effect
       to the purchase of Shares to which this  confirmation  relates,
       it will not hold 80% or more of the  outstanding  Shares of the
       relevant  Fund of the  Company  and that it will not treat such
       purchase as eligible for tax-free  treatment  under Section 351
       of the Internal Revenue Code of 1986, as amended.  If purchaser
       is a dealer, it agrees to deliver similar written confirmations
       to any  person  purchasing  any of the  Shares  to  which  this
       confirmation relates from it."

       (b) The Company and its  Transfer  Agent and  Distributor  shall have the
right to require information from the Authorized  Participant  regarding Shares'
ownership of each Fund,  and to rely  thereon to the extent  necessary to make a
determination  regarding  ownership of 80% or more of the currently  outstanding
Shares of any Fund by a Beneficial  Owner as a condition to the  acceptance of a
deposit of Deposit Securities.

11.  INDEMNIFICATION.

This section 11 shall survive the termination of this Agreement.

         (a) The  Authorized  Participant  hereby  agrees to indemnify  and hold
harmless the  Distributor,  the Company,  the Transfer Agent,  their  respective
subsidiaries,  affiliates,  directors,  officers, employees and agents, and each
person,  if any, who controls  such persons  within the meaning of Section 15 of
the 1933 Act  (each an "AP  Indemnified  Party")  from  and  against  any  loss,
liability,  cost and expense  (including  attorneys'  fees)  incurred by such AP
Indemnified Party as a result of (i) any breach by the Authorized Participant of
any provision of this  Agreement  that relates to such  Authorized  Participant;
(ii) any failure on the part of the Authorized Participant to perform any of its
obligations  set forth in the  Agreement;  (iii) any  failure by the  Authorized
Participant to comply with applicable  laws,  including rules and regulations of
self-regulatory  organizations;  (iv)  actions of such AP  Indemnified  Party in
reliance upon any  instructions  issued in  accordance  with Annex II, III or IV
hereto (as each may be amended  from time to time)  reasonably  believed  by the
Distributor  and/or the  Transfer  Agent to be genuine and to have been given by
the  Authorized  Participant,  or (v)(1) any  representation  by the  Authorized
Participant,  its  employees  or its agents or other  representatives  about the
Shares,  any AP Indemnified Party or the Company that is not consistent with the
Company's  then-current  Prospectus  made in  connection  with the  offer or the
solicitation  of an offer to buy or sell Shares and (2) any untrue  statement or
alleged untrue  statement of a material fact contained in any research  reports,
marketing  material  and sales  literature  described in Section 4 hereof or any
alleged  omission to state therein a material fact required to be stated therein
or necessary to make the  statements  therein not  misleading to the extent that
such statement or omission  relates to the Shares,  any AP Indemnified  Party or
the Company, unless, in either case, such representation,  statement or omission
was made or included by the Authorized  Participant at the written  direction of
the  Company  or tthe  Distributor  or is based  upon any  omission  or  alleged
omission  by the  Company  or the  Distributor  to  state  a  material  fact  in
connection  with such  representation,  statement or omission  necessary to make
such  representation,  statement  or omission  not  misleading.  The  Authorized
Participant and the Distributor understand and agree that the Company as a third
party  beneficiary to this Agreement is entitled and intends to proceed directly
against the


                                                                               8


                                                                  Exhibit (e)(2)

Authorized  Participant  in the event that the Authorized  Participant  fails to
honor  any of its  obligations  pursuant  to this  Agreement  that  benefit  the
Company.  The Authorized  Participant  shall not be liable to the AP Indemnified
Party for any damages  arising out of mistakes or errors in data provided to the
Authorized  Participant,  or mistakes or errors by, or out of  interruptions  or
delays of communications  with the AP Indemnified Parties due to any action of a
service provider to the Company.


         (b) The  Distributor  hereby  agrees to indemnify and hold harmless the
Authorized  Participant,  its respective  subsidiaries,  affiliates,  directors,
officers,  employees  and agents,  and each person,  if any,  who controls  such
persons  within the  meaning of Section 15 of the 1933 Act (each a  "Distributor
Indemnified  Party")  from and  against  any loss,  liability,  cost and expense
(including attorneys' fees) incurred by such Distributor  Indemnified Party as a
result of (i) any breach by the  Distributor  of any provision of this Agreement
that relates to the Distributor; (ii) any failure on the part of the Distributor
to perform any of its obligations set forth in this Agreement; (iii) any failure
by  the  Distributor  to  comply  with  applicable  laws,  including  rules  and
regulations of self-regulatory  organizations;  (iv) actions of such Distributor
Indemnified  Party in reliance upon any instructions  issued or  representations
made in accordance with Annex II, III and IV hereto (as each may be amended from
time to time)  reasonably  believed by the Authorized  Participant to be genuine
and to have  been  given by the  Distributor,  or (v) any  untrue  statement  or
alleged  untrue  statement  of a material  fact  contained  in the  Registration
Statement of the Company as  originally  filed with the SEC or in any  amendment
thereof, or in any prospectus or any statement of additional information, or any
amendment thereof or supplement  thereto,  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 not  misleading,  in
connection  with the  Authorized  Participant's  acting  in its  capacity  as an
Authorized  Participant.  The Distributor  shall not be liable to any Distribuor
Indemnified  Party for any  damages  arising  out of  mistakes or errors in data
provided to the  Distributor,  or mistakes or errors by, or out of interruptions
or delays of communications with the Distributor Indemnified Parties, due to any
action of a service provider to the Company.

         (c) This  Section  11 shall not apply to the  extent  any such  losses,
liabilities,  damages,  costs  and  expenses  are  incurred  as a  result  or in
connection  with any gross  negligence,  bad faith or willful  misconduct on the
part of the AP Indemnified  Party or the Distributor  Indemnified  Party, as the
case may be. The term "affiliate" in this Section 11 shall include, with respect
to any person, entity or organization,  any other person, entity or organization
which directly,  or indirectly through one or more intermediaries,  controls, is
controlled  by  or  is  under  common  control  with  such  person,   entity  or
organization.

12. LIMITATION OF LIABILITY.

         (a) The  Distributor  and the Transfer Agent  undertake to perform such
duties and only such duties as are  expressly  set forth  herein,  or  expressly
incorporated herein by reference,  and no implied covenants or obligations shall
be read into this Agreement against the Distributor or the Transfer Agent.

         (b) In the absence of bad faith,  negligence  or willful  misconduct on
its part,  neither the  Distributor,  nor the  Transfer  Agent,  whether  acting
directly or through  agents or  attorneys  as


                                                                               9


                                                                  Exhibit (e)(2)

provided in paragraph (d) below, shall be liable for any action taken,  suffered
or omitted or for any error of judgment  made by any of them in the  performance
of their duties hereunder.  Neither the Distributor nor the Transfer Agent shall
be  liable  for any  error of  judgment  made in good  faith  unless  the  party
exercising  such shall have been negligent in  ascertaining  the pertinent facts
necessary  to make  such  judgment.  In no event  shall the  Distributor  or the
Transfer Agent be liable for special,  indirect or consequential  loss or damage
of any kind whatsoever  (including but not limited to lost profit), even if such
parties  have  been  advised  of the  likelihood  of  such  loss or  damage  and
regardless  of the form of  action.  In no event  shall the  Distributor  or the
Transfer  Agent be liable for the acts or  omissions  of DTC,  NSCC or any other
securities depository or clearing corporation.

         (c) Neither the Distributor nor the Transfer Agent shall be responsible
or liable for any failure or delay in the performance of their obligations under
this  Agreement   arising  out  of  or  caused,   directly  or  indirectly,   by
circumstances beyond its reasonable control, including without limitation,  acts
of God;  earthquakes;  fires;  floods;  wars;  civil or  military  disturbances;
terrorism;  sabotage;  epidemics; riots;  interruptions;  loss or malfunction of
utilities, computer (hardware or software) or communications service; accidents;
labor disputes; acts of civil or military authority or governmental actions.

         (d) The Distributor and the Transfer Agent may conclusively  rely upon,
and shall be fully  protected  in acting or  refraining  from acting  upon,  any
communication  authorized  hereby  and upon  any  written  or oral  instruction,
notice, request, direction or consent reasonably believed by them to be genuine.

         (e) The Transfer Agent shall not be required to advance, expend or risk
its own funds or otherwise incur or become exposed to financial liability in the
performance  of its duties  hereunder,  except as may be required as a result of
its own gross negligence, willful misconduct or bad faith.

         (f) Tax Liability. To the extent any payment of any transfer tax, sales
or use tax,  stamp tax,  recording tax, value added tax or any other similar tax
or  government  charge  applicable to the creation or redemption of any Creation
Unit of Shares of any Fund made  pursuant  to this  Agreement  is  imposed,  the
Authorized  Participant  shall be  responsible  for the  payment  of such tax or
government  charge  regardless  of  whether or not such tax or charge is imposed
directly  on the  Authorized  Participant.  To the  extent  the  Company  or the
Distributor  is  required by law to pay any such tax or charge,  the  Authorized
Participant  agrees to  promptly  indemnify  such  party  for any such  payment,
together with any applicable penalties, additions to tax or interest thereon.

13.  INFORMATION ABOUT CREATION DEPOSITS.

         The Authorized Participant understands that the number and names of the
designated  portfolio  of  Deposit  Securities  to be  included  in the  current
Creation  Deposit for each Fund will be made  available by NSCC on each day that
the Listing Exchange is open for trading and will also be made available on each
such day through the facilities of the NSCC.

14. ACKNOWLEDGMENT.


                                                                              10


                                                                  Exhibit (e)(2)


         The Authorized  Participant  acknowledges receipt of the Prospectus and
represents that it has reviewed and understands such documents .

15.  NOTICES.

         Except  as  otherwise  specifically  provided  in this  Agreement,  all
notices  required or permitted to be given pursuant to this  Agreement  shall be
given in writing  and  delivered  by  personal  delivery  or by postage  prepaid
registered  or  certified  United  States  first  class  mail,   return  receipt
requested,  or by telex,  telegram  or  facsimile  or similar  means of same day
delivery (with a confirming copy by mail). Unless otherwise notified in writing,
all notices to the Company  shall be at the address or  telephone,  facsimile or
telex numbers as follows:

                   Attn:   TDAX Funds, Inc.
                           c/o XShares Advisors LLC
                           420 Lexington Ave, Suite 2550
                           New York, NY  10170
                           Attn: Anthony Dudzinski
                           P: (212)986-7900; F: (212)867-3857

         All notices to the  Authorized  Participant,  the  Distributor  and the
Transfer Agent shall be directed to the address or telephone, facsimile or telex
numbers indicated below the signature line of such party.

16.  EFFECTIVENESS, TERMINATION AND AMENDMENT.

         (a) This Agreement shall become  effective five (5) Business Days after
execution and delivery to the Distributor  upon notice by the Distributor to the
Authorized  Participant.  A  "Business  Day"  shall  mean  each day the  Listing
Exchange is open for regular  trading.  This  Agreement may be terminated at any
time by any party upon sixty (60) days prior written notice to the other parties
and may be terminated  earlier by the Company or the  Distributor at any time in
the event of a breach by the  Authorized  Participant  of any  provision of this
Agreement or the procedures  described or  incorporated  herein.  This Agreement
supersedes any prior such agreement between or among the parties.

         (b) This  Agreement  may be amended by the  Company or the  Distributor
from time to time without the consent of any  Beneficial  Owner by the following
procedure.  The Company or the Distributor  will mail a copy of the amendment to
the Authorized  Participant and the Company or Distributor,  as applicable.  For
purposes  of this  Agreement,  mail will be  deemed  received  by the  recipient
thereof on the fifth (5th)  Business Day following the deposit of such mail into
the U.S. Postal system. If neither the Authorized Participant or the other party
objects in writing to the amendment within five (5) days after its receipt,  the
amendment will become part of this Agreement in accordance with its terms.


17. GOVERNING LAW; CONSENT TO JURISDICTION.

          This Agreement  shall be governed by and construed in accordance  with
the laws of the State of New York  (regardless of the laws that might  otherwise
govern under applicable New York conflict of laws principles) as to all matters,
including matters of validity,  construction,


                                                                              11


                                                                  Exhibit (e)(2)

effect,  performance and remedies. Each party hereto irrevocably consents to the
jurisdiction  of the  courts of the State of New York and of any  federal  court
located in the Borough of Manhattan in such State in connection with any action,
suit or other  proceeding  arising out of or relating to this  Agreement  or any
action taken or omitted hereunder,  and waives any claim of forum non conveniens
and any  objections as to laying of venue.  Each party further  waives  personal
service of any  summons,  complaint  or other  process and agrees  that  service
thereof may be made by certified or  registered  mail  directed to such party at
such party's address for purposes of notices  hereunder.  Each party hereto each
hereby  irrevocably  waives  any and all  rights  to trial by jury in any  legal
proceeding arising out of or relating to this Agreement.

18.  SUCCESSORS AND ASSIGNS.

         This Agreement and all of the  provisions  hereof shall be binding upon
and inure to the  benefit of the  parties and their  respective  successors  and
permitted assigns.

19.  ASSIGNMENT.

         Neither this Agreement nor any of the rights,  interests or obligations
hereunder  shall be assigned by any party without the prior  written  consent of
the other  parties,  except  that any entity  into  which a party  hereto may be
merged or converted or with which it may be consolidated or any entity resulting
from any merger,  conversion,  or  consolidation  to which such party  hereunder
shall be a party, or any entity  succeeding to all or  substantially  all of the
business of the party, shall be the successor of the party under this Agreement.
The  party  resulting  from  any  such  merger,  conversion,   consolidation  or
succession  shall notify the other parties  hereto of the change.  Any purported
assignment in violation of the provisions hereof shall be null and void.

20.  INTERPRETATION.

         The article and section headings contained in this Agreement are solely
for the purpose of  reference,  are not part of the agreement of the parties and
shall not in any way affect the meaning or interpretation of this Agreement.

21.  ENTIRE AGREEMENT.

         This Agreement,  along with any other agreement or instrument delivered
pursuant to this Agreement,  supersede all prior  agreements and  understandings
between the parties with respect to the subject matter hereof.

22.  SEVERANCE.

         If any  provision  of this  Agreement  is held by any court or any act,
regulation, rule or decision of any other governmental or supra national body or
authority or regulatory or self-regulatory  organization to be invalid,  illegal
or unenforceable for any reason,  it shall be invalid,  illegal or unenforceable
only to the  extent so held and shall  not  affect  the


                                                                              12


                                                                  Exhibit (e)(2)

validity,  legality or  enforceability of the other provisions of this Agreement
and  this  Agreement  will  be  construed  as  if  such  invalid,   illegal,  or
unenforceable  provision had never been contained herein, unless the Distributor
determines  in its  discretion,  after  consulting  with the  Company,  that the
provision of this Agreement that was held invalid, illegal or unenforceable does
affect the validity,  legality or enforceability of one or more other provisions
of this Agreement,  and that this Agreement should not be continued  without the
provision  that was held invalid,  illegal or  unenforceable,  and in that case,
upon the Distributor's notification of the Company of such a determination, this
Agreement shall  immediately  terminate and the  Distributor  will so notify the
Authorized Participant immediately.

23. NO STRICT CONSTRUCTION.

          The language used in this  Agreement will be deemed to be the language
chosen by the  parties to express  their  mutual  intent,  and no rule of strict
construction will be applied against any party.

24. SURVIVAL.

         Section 11  (Indemnification)  hereof shall survive the  termination of
this Agreement.

25. OTHER USAGES.

         The following  usages shall apply in interpreting  this Agreement:  (i)
references  to  a  governmental  or  quasigovernmental   agency,   authority  or
instrumentality  shall  also refer to a  regulatory  body that  succeeds  to the
functions of such agency,  authority or  instrumentality;  and (ii)  "including"
means "including, but not limited to."


26.  COUNTERPARTS.

         This  Agreement  may be executed in one or more  counterparts,  each of
which will be deemed to be an original copy of this  Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.

                            [Signature Page Follows]



                                                                              13


                                                                  Exhibit (e)(2)



       IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the day and year written below.

DATED:  ____________


                ALPS DISTRIBUTORS, INC.
                BY:___________________________________
                TITLE:________________________________
                ADDRESS:  1290 Broadway, Suite 1100, Denver CO  80203
                TELEPHONE: 303.623.2577
                FACSIMILE:  303.623.7850


                [NAME OF  AUTHORIZED PARTICIPANT]
                BY:___________________________________
                TITLE:________________________________
                ADDRESS:______________________________
                TELEPHONE:____________________________
                FACSIMILE:___________________________________


                ACCEPTED BY: THE BANK OF NEW YORK, AS TRANSFER AGENT
                BY:__________________________________________
                TITLE:_______________________________________
                ADDRESS:_____________________________________
                TELEPHONE:___________________________________
                FACSIMILE:___________________________________




                                                                              14


                                                                  Exhibit (e)(2)





                                                                         ANNEX I
                                                                              TO
                                                AUTHORIZED PARTICIPANT AGREEMENT
                                                            FOR TDAX FUNDS, INC.


TDAX Independence 2010 Exchange-Traded Fund
TDAX Independence 2020 Exchange-Traded Fund
TDAX Independence 2030 Exchange-Traded Fund
TDAX Independence 2040 Exchange-Traded Fund
TDAX Independence In-Target Exchange-Traded Fund




                                                                              15


                                                                  Exhibit (e)(2)

                                                                        ANNEX II
                                                                              TO
                                                AUTHORIZED PARTICIPANT AGREEMENT
                                                            FOR TDAX FUNDS, INC.


                            PROCEDURES FOR PROCESSING
                            -------------------------
                      PURCHASE ORDERS AND REDEMPTION ORDERS
                      -------------------------------------

         This Annex II to the Authorized  Participant  Agreement supplements the
Prospectus  with  respect  to the  procedures  to be  used in  processing  (1) a
Purchase Order for the purchase of Shares of TDAX Funds,  Inc. in Creation Units
of each  Fund and a  (2)Redemption  Order for the  redemption  of Shares of TDAX
Funds, Inc. in Creation Units of each Fund.  Capitalized terms, unless otherwise
defined in this Annex II, have the meanings attributed to them in the Authorized
Participant Agreement or the Prospectus.

         An  Authorized  Participant  is required to have signed the  Authorized
Participant Agreement. Upon acceptance of the Agreement and execution thereof by
the Company and in connection  with the initial  Purchase Order submitted by the
Authorized  Participant,  the  Distributor  will  assign  a PIN  Number  to each
Authorized  Person  authorized to act for an Authorized  Participant.  This will
allow an  Authorized  Participant  through its  Authorized  Person(s) to place a
Purchase Order or Redemption Order with respect to the purchase or redemption of
Creation Units of Shares of TDAX Funds, Inc.




                                                                              16


                                                                  Exhibit (e)(2)

                                                              ANNEX II -- PART A
                                                                              TO
                                                AUTHORIZED PARTICIPANT AGREEMENT
                                                            FOR TDAX FUNDS, INC.


                         TO PLACE A PURCHASE ORDER FOR
                         =============================
               CREATION UNIT(S) OF SHARES OF ONE OR MORE FUNDS OF
               ==================================================
                                TDAX FUNDS, INC.


1. PLACING A PURCHASE ORDER.

         Purchase Orders for Creation Units of Shares of TDAX Funds, Inc. may be
initiated only on days that the Listing Exchange is open for trading ("Business
Days"). Purchase Orders may only be made in whole Creation Units of Shares of
each Fund.

         To begin a Purchase Order, the Authorized Participant ("AP"") must
telephone the BNY ETF Administrator at (718) 315-4512 or such other number as
the Distributor designates in writing to the AP. This telephone call must be
made by an Authorized Person of the AP not later than the closing time of the
regular trading session on the Listing Exchange which is ordinarily 4:00 p.m.
Eastern Time ("Listing Exchange Closing Time"). Upon verifying the authenticity
of the AP (as determined by the use of the appropriate PIN Number), BNY ETF
Administrator will request that the AP place the Purchase Order. To do so, the
AP must provide the appropriate ticker symbols when referring to each Fund .
After the AP has placed the Purchase Order, BNY ETF Administrator will read the
Purchase Order back to the AP. The AP then must affirm that the Purchase Order
has been taken correctly by BNY ETF Administrator. If the AP affirms that
Purchase Order has been taken correctly, BNY ETF Administrator will issue a
Confirmation Number to the AP.

 PLEASE NOTE: A PURCHASE ORDER REQUEST IS NOT COMPLETE UNTIL THE CONFIRMATION
NUMBER IS ISSUED BY BNY ETF ADMINISTRATOR. AN ORDER MAY NOT BE CANCELED BY THE
AP AFTER THE CONFIRMATION NUMBER IS ISSUED. INCOMING TELEPHONE CALLS ARE QUEUED
AND WILL BE HANDLED IN THE SEQUENCE RECEIVED. CALLS PLACED BEFORE THE LISTING
EXCHANGE CLOSING TIME WILL BY PROCESSED EVEN IF THE CALL IS ANSWERED BY BNY ETF
ADMINISTRATOR AFTER THE LISTING EXCHANGE CLOSING TIME. ACCORDINGLY, THE AP
SHOULD NOT HANG UP AND REDIAL. INCOMING CALLS THAT ARE RECEIVED AFTER THE
LISTING EXCHANGE CLOSING TIME WILL NOT BE ANSWERED BY BNY ETF ADMINISTRATOR. ALL
TELEPHONE CALLS WILL BE RECORDED.

2. RECEIPT OF TRADE CONFIRMATION.

         Subject to the conditions that a properly completed telephone Purchase
Order has been placed by the AP (either on its own or its customer's behalf) not
later than the Listing Exchange Closing Time, the Distributor will accept the
Purchase Order on behalf of Company and Distributor and will confirm in writing
to the AP that its Purchase Order has been accepted by 4:45 p.m. Eastern
Standard Time on the Business Day that the Purchase Order is received.



                                                                              17


                                                                  Exhibit (e)(2)


3. QUALITY ASSURANCE.

         After a Confirmation Number is issued by BNY ETF Administrator to the
AP, BNY ETF Administrator will either fax or email a written version of the
Purchase Order to the AP. Upon receipt, the AP should immediately telephone
Distributor, if the Participant believes that the Purchase Order has not been
taken correctly by BNY ETF Administrator. In addition, BNY ETF Administrator
will telephone the AP within 15 minutes of the fax or e-mail to corroborate the
Purchase Order

4. PROCESSING A PURCHASE ORDER.

         During the telephone call, BNY ETF Administrator will request that the
AP state that the AP will not own 80% or more of the Shares of any Fund upon
execution of the Purchase Order. If the AP is not able to so confirm, BNY ETF
Administrator has the right to not accept the Purchase Order.


5. REJECTING OR SUSPENDING PURCHASE ORDERS.
         The Company or Distributor reserve the absolute right to reject or
revoke acceptance of a Purchase Order if (i) the order is not in proper form as
determined by the Company, BNY ETF Administrator or Distributor, (ii) the
portfolio of Deposit Securities delivered is not as specified by Distributor;
(iii) acceptance of the Deposit Securities would have certain adverse tax
consequences to the Company or any Fund; (iv) the acceptance of the Portfolio
Deposit would, in the opinion of counsel, be unlawful; (v) the acceptance of the
Portfolio Deposit would otherwise, in the discretion of Company or Adviser, have
an adverse effect on Company or the rights of beneficial owners of a Fund; or
(vi) circumstances outside the control of Company, Distributor, Transfer Agent
or Adviser make it for all practical purposes impossible to process a Purchase
Order. The Company or the Distributor shall notify the AP of a rejection or
revocation of any Purchase Order. The Company and Distributor are under no duty,
however, to give notification of any defects or irregularities in the delivery
of Portfolio Deposits nor shall either of them incur any liability for the
failure to give any such notification.

          Except as provided  herein,  all Purchase Orders for Creation Units of
Shares of the Company are  irrevocable by the AP. The Company  acknowledges  its
agreement to return to the AP or any party for which it is acting any  dividend,
distribution  or other  corporate  action  paid to the Company in respect of any
Deposit  Security that is transferred to Company that, based on the valuation of
such Deposit  Security at the time of transfer,  should have been paid to the AP
or any party for which it is acting.


6. CONTRACTUAL SETTLEMENT

         (1)Except as provided below, Deposit Securities must be delivered
through the National Securities Clearing Corporation ("NSCC") to a Depository
Trust Company ("DTC") account maintained at the Custodian of the Company on or
before the Domestic Contractual Settlement Date (defined below). The AP must
also make available on or before the Contractual Settlement Date, by means
satisfactory to Company, immediately available or same day funds estimated by
Company to be sufficient to pay the Cash Component next determined after


                                                                              18


                                                                  Exhibit (e)(2)


acceptance of the Purchase Order, together with the applicable purchase
Transaction Fee. Any excess funds will be returned following settlement of the
issue of the Creation Unit of Shares of the Company. The "Domestic Contractual
Settlement Date" is the earlier of (i) date upon which all of the required
Deposit Securities, the Cash Component and any other cash amounts which may be
due are delivered to Company and (ii) trade date plus three (t +3) Business
Days. Except as provided in the next two paragraphs, a Creation Unit of Shares
of any Fund will be issued concurrently with the transfer of good title to
Company of the portfolio of Deposit Securities through the NSCC's Continuous Net
Settlement ("CNS") system and the payment of the Cash Component and the purchase
Transaction Fee through DTC.

         (2) The Company reserves the right to permit or require the
substitution of an amount of cash (i.e., a "cash in lieu" amount ) to be added
to the Cash Component to replace any Deposit Security with respect to any
Domestic Fund which may not be available in sufficient quantity for delivery or
which may not be eligible for transfer through the CNS Clearing Process, or
which may not be eligible for transfer through the systems of DTC and hence not
eligible for transfer through the CNS Clearing Process (discussed below) and
will be at the expense of the Fund and will affect the value of all Shares of
such Fund; but the Company, subject to the approval of the Board, may adjust the
"Transaction Fee" within the parameters described below to protect ongoing
shareholders.

         (3) Any settlement outside the CNS Clearing Process is subject to
additional requirements and fees as discussed in the Prospectus.

7.   CASH PURCHASES

         When, in the sole discretion of Company, cash purchases of Creation
Units of Shares are available or specified for a Fund, such purchases shall be
effected in essentially the same manner as in-kind purchases thereof. In the
case of a cash purchase, the AP must pay the cash equivalent of the Deposit
Securities it would otherwise be required to provide through an in-kind
purchase, plus the same Cash Component required to be paid by an in-kind
purchaser. In addition, to offset Company's brokerage and other transaction
costs associated with using the cash to purchase the requisite Deposit
Securities, the AP must pay a fixed purchase Transaction Fee, plus an additional
variable charge for cash purchases, which is expressed as a percentage of the
value of the Deposit Securities. The Transaction Fees for in-kind and cash
purchases of Creation Units of Shares are described in the Prospectus.




                                                                              19


                                                                  Exhibit (e)(2)


                                                              ANNEX II -- PART B
                                                                              TO
                                                AUTHORIZED PARTICIPANT AGREEMENT
                                                            FOR TDAX FUNDS, INC.

                   PROCEDURES TO PLACE A REDEMPTION ORDER FOR
                   ==========================================
               CREATION UNIT(S) OF SHARES OF ONE OR MORE FUNDS OF
               ==================================================
                                TDAX FUNDS, INC.

1.   PLACING A REDEMPTION ORDER

         Redemption Orders for Creation Units of Shares may be initiated only on
days that the Listing Exchange is open for trading. Redemption Orders may only
be made in whole Creation Units of shares of each Fund. To begin a Redemption
Order, the AP must telephone BNY ETF Administrator at (718) 315-4512. This
telephone call must be made by an Authorized Person of the AP not later than the
closing time of the regular trading session on the Listing Exchange which is
ordinarily 4:00 p.m. Eastern Standard Time ("Listing Exchange Closing Time").
Upon verifying the authenticity of the AP (as determined by the use of the
appropriate PIN Number), BNY ETF Administrator will request that the AP place
the Redemption Order. To do so, the AP must provide the appropriate ticker
symbols when referring to Fund. After the AP has placed the Redemption Order,
BNY ETF Administrator will read the Redemption Order back to the AP. The AP then
must affirm that the Redemption Order has been taken correctly by BNY ETF
Administrator. If the AP affirms that Redemption Order has been taken correctly,
BNY ETF Administrator will issue a Confirmation Number to the AP.

PLEASE NOTE: A REDEMPTION ORDER REQUEST IS NOT COMPLETE UNTIL THE CONFIRMATION
NUMBER IS ISSUED BY BNY ETF ADMINISTRATOR. AN ORDER MAY NOT BE CANCELED BY THE
AP AFTER THE CONFIRMATION NUMBER IS ISSUED. INCOMING TELEPHONE CALLS ARE QUEUED
AND WILL BE HANDLED IN THE SEQUENCE RECEIVED. CALLS PLACED BEFORE THE LISTING
EXCHANGE CLOSING TIME WILL BY PROCESSED EVEN IF THE CALL IS ANSWERED BY BNY ETF
ADMINISTRATOR AFTER THE LISTING EXCHANGE CLOSING TIME. ACCORDINGLY, THE AP
SHOULD NOT HANG UP AND REDIAL. INCOMING CALLS THAT ARE RECEIVED AFTER THE
LISTING EXCHANGE CLOSING TIME WILL NOT BE ANSWERED BY BNY ETF ADMINSTRATOR. ALL
TELEPHONE CALLS MAY BE RECORDED.

2.   RECEIPT OF CONFIRMATION.

         Subject to the conditions that a duly completed Redemption Order is
received by Distributor from the AP on behalf of itself or another redeeming
investor by the Listing Exchange Closing Time, the Distributor will accept the
Redemption Order on behalf of Company and Distributor and will confirm in
writing to the AP that its Redemption Order has been accepted by 4:45 p.m.
Eastern Standard Time on the Business Day the Redemption Order is received.

3. QUALITY ASSURANCE.

         (a) After a Confirmation Number is issued by BNY ETF Administrator to
the AP, BNY ETF Administrator will either fax or email a copy of the Redemption
Order to the AP. Upon receipt, the AP should immediately telephone BNY ETF
Administrator, if the AP believes that


                                                                              20


                                                                  Exhibit (e)(2)

the Redemption Order has not been taken correctly by BNY ETF Administrator. In
addition, BNY ETF Administrator will telephone the AP within 15 minutes of the
fax or e- mail to corroborate the Redemption Order.

         (b) In the Redemption Order, the AP will be required to acknowledge its
agreement on behalf of itself and any party for which it is acting (whether as a
customer or otherwise) to return to Company any dividend, distribution or other
corporate action paid to it or to the party for which it is acting in respect of
any Deposit Security that is transferred to the AP or any party for which it is
acting that, based on the valuation of such Deposit Security at the time of
transfer, should be paid to the Fund to which the Redemption Order relates. In
the Redemption Order, the AP will also be required to acknowledge its agreement
on behalf of itself and any party for which it is acting (whether as a customer
or otherwise) that Company is entitled to reduce the amount of money or other
proceeds due to the AP or any party for which it is acting by an amount equal to
any dividend, distribution or other corporate action to be paid to it or to the
party for which it is acting in respect of any Deposit Security that is
transferred to the AP or any party for which it is acting that, based on the
valuation of such Deposit Security at the time of transfer, should be paid to
the Fund to which the Redemption Order relates.

4.   TAKING DELIVERY OF DEPOSIT SECURITIES.

         The Deposit Securities constituting in-kind redemption proceeds will be
delivered to the appropriate account which must be indicated in the AP's
Standing Redemption Instructions. An Authorized Person of the AP may amend the
AP's Standing Redemption Instructions from time to time in writing to BNY ETF
Administrator and Company in a form approved by Company. A redeeming Beneficial
Owner or the AP acting on behalf of such Beneficial Owner must maintain
appropriate securities broker-dealer, bank or other custody arrangements to
which account such Deposit Securities will be delivered. Redemptions of Shares
for Deposit Securities will be subject to compliance with applicable United
States federal and state securities laws.

5.   CONTRACTUAL SETTLEMENT.

         (1) Except as provided below, the Shares of any Domestic Fund must be
delivered through the National Securities Clearing Corporation ("NSCC") to a
Depository Company Company ("DTC") account maintained at the applicable
custodian of any Domestic Fund on or before the Domestic Contractual Settlement
Date (defined below). The Company will make available on the Domestic
Contractual Settlement Date, the Cash Component next determined after acceptance
of the Redemption Order, less the applicable purchase Transaction Fee. The
"Domestic Contractual Settlement Date" is the date upon which all of the
required Shares must be delivered to the Company and, the Deposit Securities,
Cash Component less any fees are delivered by the Company to the AP (ordinarily
trade date plus three (t + 3) Business Days). Except as provided in the next two
paragraphs, the Deposit Securities representing Creation Units of Shares will be
issued concurrently with the transfer of good title to Company of the required
number of Shares through the NSCC's Continuous Net Settlement (CNS) system and
the delivery of the Cash Component less the purchase Transaction Fee through
DTC.

         (2) The Company reserves the right to permit or require the
substitution of an amount of cash (i.e., a "cash in lieu" amount ) to be added
to the Cash Component to replace any Deposit Security with respect to a Fund
which may not be available in sufficient quantity for


                                                                              21


                                                                  Exhibit (e)(2)

delivery or which may not be eligible for transfer through the CNS Clearing
Process, or which may not be eligible for transfer through the systems of DTC
and hence not eligible for transfer through the CNS Clearing Process (discussed
below) and will be at the expense of the Fund and will affect the value of all
Shares of such Fund ; but the Company, subject to the approval of the Board, may
adjust the Transaction Fee within the parameters described below to protect
ongoing shareholders. Any settlement outside the CNS Clearing Process is subject
to additional requirements and fees as discussed in the Prospectus.

         (3) In the event that the number of Shares is insufficient on the
settlement date for Creation Unit(s) of Shares, the Company may deliver the
Deposit Securities notwithstanding such deficiency in reliance on the
undertaking of the AP to deliver the missing Shares as soon as possible, which
undertaking shall be secured by such the AP's delivery and maintenance of
collateral consisting of cash having a value at least equal to 105% of the value
of the missing Shares. The parties hereto agree that the delivery of such
collateral shall be made in accordance with the Cash Collateral Settlement
Procedures, which such procedures shall be provided to the AP by Distributor
upon request. The parties hereto further agree that Company may purchase the
missing Shares at any time and the AP agrees to accept liability for any
shortfall between the cost to the Company of purchasing such securities and the
value of the collateral, which may be sold by Company at such time, and in such
manner, as Company may determine in its sole discretion.

6. CASH REDEMPTIONS.

 In the event that, in the sole discretion of Company, cash redemptions are
permitted or required by Company, proceeds will be paid to the AP redeeming
Shares on behalf of the redeeming investor as soon as practicable after the date
of redemption.

7.   STANDING REDEMPTION INSTRUCTIONS.

         Annex V hereto contains the AP's Standing Redemption Instructions,
which includes information identifying the account(s) into which Deposit
Securities of each Fund and any other redemption proceeds should be delivered by
Company pursuant to a Redemption Order.




                                                                              22


                                                                  Exhibit (e)(2)

                                                              ANNEX II -- PART C
                                                                              TO
                                                AUTHORIZED PARTICIPANT AGREEMENT
                                                            FOR TDAX FUNDS, INC.




                             TDAX FUNDS FLOW PROCESS
--------------------------------------------------------------------------------

This Annex II-Part C supplements the Fund's Prospectus with respect to the
procedures to be used by the Distributor and Transfer Agent in processing an
order for the creation or redemption of Shares of any Fund of the Company.

A. The AP is required to have (i) signed an Authorized Participant Agreement for
Fund and (ii) assigned a personal identification number to each Authorized
Person that the AP has authorized to act for such AP. This will allow an AP
through its Authorized Person(s) to place a creation or redemption order with
respect to Shares of any Fund of the Company.

B. The AP and Distributor shall implement the "Funds Flow Process" as agreed to
by the parties from time to time.

C. Note that trades placed through the NSCC/DTC may only occur on any day that
NSCC/DTC is open for business ("NSCC/DTC Business Day") .




                               FUNDS FLOW PROCESS


------------------------------------------------------------------------------------------------------------------------------------
                                  ORIGINATOR                                                     ACTIVITY
------------------------------------------------------------------------------------------------------------------------------------

1. The AP calls on BNY's ETF Administrator recorded number to place a Share       1.  The  BNY  - ETF Administrator  greets
Creation and/or Redemption order. These trades are to be placed by 4:00 PM EST        caller.
on any Listing Exchange Business Day.

------------------------------------------------------------------------------------------------------------------------------------

2. AP identifies his/her name, the Institution he/she represents, and PIN #.      2   BNY - ETF Administrator will confirm the
                                                                                      AP's PIN #.

The AP states the Fund name(s) and relevant ticker symbol(s).                         The BNY - ETF Administrator records the PIN
                                                                                      # and the order, and provides the AP with
AP will identify and list any securities that will not be delivered or                an order confirmation number.
received in kind.

AP will make alternate arrangements with the ETF Administrator to deliver or          The order confirmation constitutes a binding
receive the value for those securities that cannot be delivered. AP and ETF           order, which may only be reversed by the
Administrator will exchange delivery or receive instructions for any security         ETF Administrator, the Distributor or the
being delivered outside of the CNS system.                                            Fund.

                                                                                      AP will make alternate arrangements
------------------------------------------------------------------------------------------------------------------------------------




                                                                              23


                                                                  Exhibit (e)(2)






------------------------------------------------------------------------------------------------------------------------------------
                                                                                      with the ETF Administrator to deliver or
                                                                                      receive the value for those securities that
                                                                                      cannot be delivered. AP and ETF Administrator
                                                                                      will exchange delivery or receive instructions
                                                                                      for any security being delivered outside of
                                                                                      the CNS system.
------------------------------------------------------------------------------------------------------------------------------------

3.AP will Fax a copy of the order form to the BNY ETF Administrator within        3.  The BNY - ETF Administrator will receive
15 minutes from the time the call is made.                                            a copy of the completed order form from the
                                                                                      AP Faxed within within 15 minutes from the
                                                                                      time the order is placed.

The AP will provide, as a part of the order form, a statement confirming that         All orders received from the AP's are time
the AP will not be placing trades that would raise the AP's total holdings to         stamped by the BNY - ETF Administrator at
80% or more of any Fund                                                               the time the order is placed

The signed Order Form will be sent as the physical receipt for the AP that            The Distributor will verify that the
the order is confirmed.                                                               appropriate disclaimers have been made by
                                                                                      the AP and validate the disclaimer by
                                                                                      calculating the AP's position, including the
                                                                                      subscriptions requested, to the total fund
                                                                                      shares outstanding

The above procedures will be repeated until all orders have been placed by the        The Distributor will sign the Order Form and
AP.                                                                                   the signed Order Form will be sent as the
                                                                                      physical receipt for the AP that the order
                                                                                      is confirmed.

------------------------------------------------------------------------------------------------------------------------------------
4. The AP receives the fax                                                        4.  The AP will assume responsibility for an
                                                                                      incorrect trade and contact the ETF
The AP will  assume  responsibility  for an  incorrect  trade                         Administrator if necessary.

                                                                                      If trades are corrected, the BNY - ETF
                                                                                      Administrator will delete the first trade
                                                                                      and reenter the corrected trade. A second
                                                                                      affirmation will be faxed to the AP with all
                                                                                      trades placed that day. The corrected trade
                                                                                      will be coded on the affirmation so that the
                                                                                      AP can see the correction.

                                                                                      No corrections will be permitted
------------------------------------------------------------------------------------------------------------------------------------




                                                                              24


                                                                  Exhibit (e)(2)






------------------------------------------------------------------------------------------------------------------------------------
                                                                                      after 4p.m.

------------------------------------------------------------------------------------------------------------------------------------
5. EXCEPTION - International Settlements

AP's must deliver units for redemption orders no later than Trade Date Plus 1 in
order to meet the affirmed order requirements placed the previous day.

------------------------------------------------------------------------------------------------------------------------------------
  * Times may vary depending on the trade volume from APs.




                                                                              25


                                                                  Exhibit (e)(2)

                                                                       ANNEX III
                                                                              TO
                                                AUTHORIZED PARTICIPANT AGREEMENT
                                                            FOR TDAX FUNDS, INC.



                 FORM OF CERTIFIED AUTHORIZED PERSONS OF THE AP
                 ==============================================

The following are the names, titles and signatures of all persons (each
an"Authorized Person") authorized to give instructions relating to any activity
contemplated by this Agreement or any other notice, request or instruction on
behalf of the AP pursuant to this Agreement.

Name:      __________________
Title:     __________________
Signature: __________________

Name:      __________________
Title:     __________________
Signature: __________________

Name:      __________________
Title:     __________________
Signature: __________________

     The undersigned, [name], [title], [company], does hereby certify that the
persons listed above have been duly elected to the offices set forth beneath
their names, that they presently hold such offices, that they have been duly
authorized to act as Authorized Persons of this Institution in its capacity as
an AP pursuant to the Agreement by and among _____________ Company,
--------------, as Distributor and [name of the AP], dated [date] and that their
signatures set forth above are their own true and genuine signatures.

In Witness Whereof, the undersigned has hereby set his/her hand and the seal of
[company].

Date:    _________________  ___________________
                    [name,  title]



                                                                              26


                                                                  Exhibit (e)(2)

                                                                        ANNEX IV
                                                                              TO
                                                AUTHORIZED PARTICIPANT AGREEMENT
                                                            FOR TDAX FUNDS, INC.




                                 THE AP ACCOUNTS
                                 ===============
                       FOR DELIVERY OF DEPOSIT SECURITIES
                       ==================================

The  accounts  into which the TDAX Funds,  Inc.  should  deposit the  securities
constituting  the Deposit  Securities of each Fund upon redemption by the AP are
set forth below:

                         Name of AP: __________________
                        Account Name: __________________
                       Account Number: __________________
                   Other Reference Number: __________________


                                                                              27





                                                                  Exhibit (g)(1)


                                CUSTODY AGREEMENT


         AGREEMENT,  dated as of July 24,  2007  between  TDAX  Funds,  Inc.,  a
Corporation  organized  and  existing  under  the laws of  Maryland  having  its
principal  office and place of business at 420 Lexington  Ave,  Suite 2550,  New
York,  NY 10170 (the  "Fund") and The Bank of New York,  a New York  corporation
authorized to do a banking  business  having its  principal  office and place of
business at One Wall Street, New York, New York 10286 ("Custodian").

                              W I T N E S S E T H:

that for and in consideration  of the mutual promises  hereinafter set forth the
Fund and Custodian agree as follows:

                                   ARTICLE I
                                   DEFINITIONS

         Whenever used in this  Agreement,  the  following  words shall have the
meanings set forth below:

         1. "Authorized  Person" shall be any person,  whether or not an officer
or  employee of the Fund,  duly  authorized  by the Fund's  board to execute any
Certificate  or to  give  any  Oral  Instruction  with  respect  to one or  more
Accounts,  such persons to be  designated  in a  Certificate  annexed  hereto as
Schedule I hereto or such other Certificate as may be received by Custodian from
time to time.

         2. "Custodian Affiliate" shall mean any office, branch or subsidiary of
The Bank of New York Company, Inc.

         3.  "Book-Entry   System"  shall  mean  the  Federal   Reserve/Treasury
book-entry  system for receiving and delivering  securities,  its successors and
nominees.

         4.  "Business  Day" shall mean any day on which  Custodian and relevant
Depositories are open for business.

         5.  "Certificate"  shall  mean  any  notice,   instruction,   or  other
instrument in writing,  authorized or required by this  Agreement to be given to
Custodian,  which is  actually  received  by  Custodian  by letter or  facsimile
transmission  and  signed  on behalf  of the Fund by an  Authorized  Person or a
person reasonably believed by Custodian to be an Authorized Person.

         6. "Composite Currency Unit" shall mean the Euro or any other composite
currency  unit  consisting  of the  aggregate of specified  amounts of specified
currencies, as such unit may be constituted from time to time.

         7.  "Depository"  shall  include  (a) the  Book-Entry  System,  (b) the
Depository Trust Company, (c) any other clearing agency or securities depository
registered  with the Securities and





Exchange  Commission  identified  to the Fund  from  time to  time,  and (d) the
respective successors and nominees of the foregoing.

         8.  "Foreign  Depository"  shall mean (a)  Euroclear,  (b)  Clearstream
Banking,  societe anonyme, (c) each Eligible Securities Depository as defined in
Rule 17f-7 under the Investment  Company Act of 1940, as amended,  identified to
the Fund from time to time,  and (d) the  respective  successors and nominees of
the foregoing.

         9.  "Instructions"  shall  mean  communications  actually  received  by
Custodian by S.W.I.F.T.,  tested telex, letter, facsimile transmission, or other
method or system  specified by Custodian as available for use in connection with
the services hereunder.

         10.  "Oral  Instructions"  shall mean verbal  instructions  received by
Custodian  from an  Authorized  Person or from a person  reasonably  believed by
Custodian to be an Authorized Person.

         11.  "Series"  shall mean the various  portfolios,  if any, of the Fund
listed on Schedule II hereto,  and if none are listed references to Series shall
be references to the Fund.

         12. "Securities" shall include,  without  limitation,  any common stock
and other equity securities, bonds, debentures and other debt securities, notes,
mortgages  or other  obligations,  and any  instruments  representing  rights to
receive,  purchase,  or subscribe for the same, or representing any other rights
or  interests  therein  (whether  represented  by a  certificate  or  held  in a
Depository or by a Subcustodian).

         13.  "Subcustodian" shall mean a bank (including any branch thereof) or
other financial  institution (other than a Foreign  Depository)  located outside
the U.S. which is utilized by Custodian in connection with the purchase, sale or
custody of Securities  hereunder  and  identified to the Fund from time to time,
and their respective successors and nominees.

                                   ARTICLE II
                       APPOINTMENT OF CUSTODIAN; ACCOUNTS;
                   REPRESENTATIONS, WARRANTIES, AND COVENANTS

         1.  (a)  The  Fund  hereby  appoints  Custodian  as  custodian  of  all
Securities and cash at any time  delivered to Custodian  during the term of this
Agreement, and authorizes Custodian to hold Securities in registered form in its
name or the name of its nominees.  Custodian hereby accepts such appointment and
agrees to  establish  and  maintain  one or more  securities  accounts  and cash
accounts for each Series in which  Custodian  will hold  Securities  and cash as
provided  herein.  Custodian  shall maintain books and records  segregating  the
assets of each Series from the assets of any other Series.  Such accounts (each,
an "Account"; collectively, the "Accounts") shall be in the name of the Fund.

             (b)  Custodian  may from  time to time  establish  on its books and
records  such  sub-accounts  within each Account as the Fund and  Custodian  may
agree upon (each a "Special


                                      -2-



Account"),  and  Custodian  shall  reflect  therein  such assets as the Fund may
specify in a Certificate or Instructions.

             (c) Custodian may from time to time establish pursuant to a written
agreement  with and for the  benefit  of a  broker,  dealer,  future  commission
merchant or other third party  identified in a Certificate or Instructions  such
accounts on such terms and conditions as the Fund and Custodian shall agree, and
Custodian  shall transfer to such account such  Securities and money as the Fund
may specify in a Certificate or Instructions.

         2. The Fund hereby represents and warrants,  which  representations and
warranties  shall be continuing  and shall be deemed to be reaffirmed  upon each
delivery of a Certificate or each giving of Oral Instructions or Instructions by
the Fund, that:

             (a) It is  duly  organized  and  existing  under  the  laws  of the
jurisdiction  of its  organization,  with full power to carry on its business as
now  conducted,  to enter into this  Agreement,  and to perform its  obligations
hereunder;

             (b) This Agreement has been duly authorized, executed and delivered
by the Fund,  approved by a  resolution  of its board,  constitutes  a valid and
legally  binding  obligation of the Fund,  enforceable  in  accordance  with its
terms, and there is no statute,  regulation,  rule, order or judgment binding on
it, and no provision of its charter or by-laws, nor of any mortgage,  indenture,
credit  agreement or other  contract  binding on it or affecting  its  property,
which would prohibit its execution or performance of this Agreement;

             (c) It is conducting  its business in substantial  compliance  with
all applicable laws and requirements,  both state and federal,  and has obtained
all  regulatory  licenses,  approvals  and  consents  necessary  to carry on its
business as now conducted;

             (d) It will not  knowingly  use the services  provided by Custodian
hereunder in any manner that is, or will result in, a violation of any law, rule
or regulation applicable to the Fund;

             (e) Its board or its foreign  custody  manager,  as defined in Rule
17f-5 under the Investment  Company Act of 1940, as amended (the "`40 Act"), has
determined that use of each Subcustodian  (including any Replacement  Custodian)
which  Custodian is  authorized  to utilize in  accordance  with Section 1(a) of
Article III hereof satisfies the applicable requirements of the `40 Act and Rule
17f-5 thereunder;

             (f) The Fund or its  investment  adviser  has  determined  that the
custody  arrangements of each Foreign Depository  provide reasonable  safeguards
against the custody risks associated with  maintaining  assets with such Foreign
Depository within the meaning of Rule 17f-7 under the `40 Act;

             (g) It is fully informed of the  protections  and risks  associated
with various  methods of transmitting  Instructions  and Oral  Instructions  and
delivering  Certificates  to Custodian,  shall,  and shall cause each Authorized
Person,  to safeguard  and treat with  extreme  care any user and  authorization
codes,  passwords and/or authentication keys, understands that


                                      -3-



there may be more secure methods of transmitting or delivering the same than the
methods  selected by it,  agrees  that the  security  procedures  (if any) to be
followed in connection  therewith  provide a commercially  reasonable  degree of
protection in light of its particular needs and circumstances,  and acknowledges
and agrees that Instructions need not be reviewed by Custodian, may conclusively
be presumed by Custodian to have been given by person(s)  duly  authorized,  and
may be acted upon as given;

             (h) It shall manage its borrowings,  including, without limitation,
any advance or overdraft (including any day-light overdraft) in the Accounts, so
that the aggregate of its total  borrowings  for each Series does not exceed the
amount such Series is permitted to borrow under the `40 Act;

             (i) Its transmission or giving of, and Custodian acting upon and in
reliance on, Certificates,  Instructions,  or Oral Instructions pursuant to this
Agreement shall at all times comply with the `40 Act;

             (j) It shall impose and maintain  restrictions on the  destinations
to which cash may be disbursed by Instructions to ensure that each  disbursement
is for a proper purpose; and

             (k) It has the right to make the  pledge  and  grant  the  security
interest and security entitlement to Custodian contained in Section 1 of Article
V hereof,  free of any right of redemption or prior claim of any other person or
entity,  such pledge and such grants shall have a first  priority  subject to no
setoffs,  counterclaims,  or  other  liens  or  grants  prior  to or on a parity
therewith,  and it shall take such additional  steps as Custodian may require to
assure such priority.

         3. The Fund hereby  covenants  that it shall from time to time complete
and execute and deliver to Custodian upon Custodian's  request a Form FR U-1 (or
successor  form)  whenever the Fund borrows from  Custodian any money to be used
for the  purchase  or  carrying  of margin  stock as defined in Federal  Reserve
Regulation U.

                                  ARTICLE III
                          CUSTODY AND RELATED SERVICES

         1.  (a)  Subject  to the  terms  hereof,  the  Fund  hereby  authorizes
Custodian to hold any Securities received by it from time to time for the Fund's
account.  Custodian  shall be entitled to utilize,  subject to subsection (c) of
this Section 1, Depositories,  Subcustodians,  and, subject to subsection (d) of
this Section 1, Foreign Depositories,  to the extent possible in connection with
its performance  hereunder.  Securities and cash held in a Depository or Foreign
Depository  will be held  subject to the  rules,  terms and  conditions  of such
entity.  Securities and cash held through Subcustodians shall be held subject to
the terms and  conditions of  Custodian's  agreements  with such  Subcustodians.
Subcustodians  may be authorized to hold  Securities in Foreign  Depositories in
which such Subcustodians participate.  Unless otherwise required by local law or
practice or a particular  subcustodian  agreement,  Securities  deposited with a
Subcustodian,  a Depositary or a Foreign Depository will be held in a commingled
account, in the name of Custodian,  holding only Securities held by Custodian as
custodian for its customers.  Custodian  shall identify on its


                                      -4-



books and records the Securities  and cash  belonging to the Fund,  whether held
directly  or  indirectly  through   Depositories,   Foreign   Depositories,   or
Subcustodians.  Custodian shall,  directly or indirectly through  Subcustodians,
Depositories, or Foreign Depositories, endeavor, to the extent feasible, to hold
Securities in the country or other  jurisdiction in which the principal  trading
market for such Securities is located, where such Securities are to be presented
for cancellation  and/or payment and/or  registration,  or where such Securities
are acquired.  Custodian at any time may cease utilizing any Subcustodian and/or
may replace a  Subcustodian  with a  different  Subcustodian  (the  "Replacement
Subcustodian").  In the  event  Custodian  selects a  Replacement  Subcustodian,
Custodian shall not utilize such Replacement Subcustodian until after the Fund's
board or  foreign  custody  manager  has  determined  that  utilization  of such
Replacement  Subcustodian  satisfies  the  requirements  of the `40 Act and Rule
17f-5 thereunder.

             (b) Unless  Custodian has received a Certificate or Instructions to
the contrary,  Custodian shall hold Securities indirectly through a Subcustodian
only if (i) the  Securities  are not  subject  to any  right,  charge,  security
interest,  lien or  claim  of any  kind in  favor  of such  Subcustodian  or its
creditors or operators, including a receiver or trustee in bankruptcy or similar
authority,  except for a claim of payment for the safe custody or administration
of Securities on behalf of the Fund by such  Subcustodian,  and (ii)  beneficial
ownership of the Securities is freely transferable  without the payment of money
or value other than for safe custody or administration.

             (c) With respect to each  Depository,  Custodian (i) shall exercise
due care in accordance with reasonable  commercial  standards in discharging its
duties as a securities intermediary to obtain and thereafter maintain Securities
or financial assets deposited or held in such Depository, and (ii) will provide,
promptly upon request by the Fund, such reports as are available  concerning the
internal accounting controls and financial strength of Custodian.

             (d)  With  respect  to each  Foreign  Depository,  Custodian  shall
exercise reasonable care,  prudence,  and diligence (i) to provide the Fund with
an analysis of the custody risks  associated  with  maintaining  assets with the
Foreign Depository, and (ii) to monitor such custody risks on a continuing basis
and  promptly  notify the Fund of any  material  change in such risks.  The Fund
acknowledges  and agrees that such analysis and monitoring  shall be made on the
basis of, and limited by,  information  gathered from  Subcustodians  or through
publicly available  information  otherwise obtained by Custodian,  and shall not
include any evaluation of Country Risks. As used herein the term "Country Risks"
shall  mean  with  respect  to  any  Foreign   Depository:   (a)  the  financial
infrastructure  of the  country  in which it is  organized,  (b) such  country's
prevailing custody and settlement practices, (c) nationalization,  expropriation
or other governmental  actions,  (d) such country's regulation of the banking or
securities  industry,  (e)  currency  controls,  restrictions,  devaluations  or
fluctuations,  and (f) market  conditions  which  affect the order  execution of
securities transactions or affect the value of securities.

         2.   Custodian   shall  furnish  the  Fund  with  an  advice  of  daily
transactions  (including a confirmation  of each transfer of  Securities)  and a
monthly summary of all transfers to or from the Accounts.


                                      -5-



         3. With respect to all  Securities  held  hereunder,  Custodian  shall,
unless otherwise instructed to the contrary:

             (a)  Receive all income and other  payments  and advise the Fund as
promptly as practicable of any such amounts due but not paid;

             (b)  Present  for  payment  and  receive  the amount  paid upon all
Securities  which may mature and advise the Fund as promptly as  practicable  of
any such amounts due but not paid;

             (c) Forward to the Fund copies of all information or documents that
it may actually  receive from an issuer of Securities  which,  in the opinion of
Custodian, are intended for the beneficial owner of Securities;

             (d)  Execute,   as  custodian,   any   certificates  of  ownership,
affidavits,  declarations  or  other  certificates  under  any tax  laws  now or
hereafter in effect in connection with the collection of bond and note coupons;

             (e) Hold directly or through a Depository, a Foreign Depository, or
a  Subcustodian  all rights and similar  Securities  issued with  respect to any
Securities credited to an Account hereunder; and

             (f)  Endorse  for  collection  checks,  drafts or other  negotiable
instruments.

         4. (a)  Custodian  shall  notify  the Fund of rights  or  discretionary
actions with respect to Securities held  hereunder,  and of the date or dates by
when such rights must be exercised or such action must be taken,  provided  that
Custodian  has actually  received,  from the issuer or the  relevant  Depository
(with  respect to Securities  issued in the United  States) or from the relevant
Subcustodian,  Foreign Depository, or a nationally or internationally recognized
bond or corporate action service to which Custodian subscribes, timely notice of
such  rights or  discretionary  corporate  action  or of the date or dates  such
rights must be exercised or such action must be taken.  Absent actual receipt of
such  notice,  Custodian  shall have no  liability  for failing to so notify the
Fund.

             (b) Whenever Securities  (including,  but not limited to, warrants,
options,  tenders,  options  to tender or  non-mandatory  puts or calls)  confer
discretionary  rights  on the  Fund  or  provide  for  discretionary  action  or
alternative  courses of action by the Fund,  the Fund shall be  responsible  for
making any decisions  relating  thereto and for  directing  Custodian to act. In
order  for  Custodian  to  act,  it  must  receive  the  Fund's  Certificate  or
Instructions  at  Custodian's  offices,  addressed as Custodian may from time to
time request, not later than noon (New York time) at least two (2) Business Days
prior to the last scheduled date to act with respect to such  Securities(or such
earlier date or time as Custodian may  reasonably  specify to the Fund).  Absent
Custodian's timely receipt of such Certificate or Instructions,  Custodian shall
not be liable for  failure to take any action  relating  to or to  exercise  any
rights conferred by such Securities.


                                      -6-



         5. All voting rights with respect to  Securities,  however  registered,
shall be exercised by the Fund or its designee. Custodian will make available to
the Fund proxy voting  services  upon the request of, and for the  jurisdictions
selected by, the Fund in  accordance  with terms and  conditions  to be mutually
agreed upon by Custodian and the Fund.

         6. Custodian  shall promptly  advise the Fund upon  Custodian's  actual
receipt of  notification  of the partial  redemption,  partial  payment or other
action  affecting less than all Securities of the relevant  class. If Custodian,
any Subcustodian, any Depository, or any Foreign Depository holds any Securities
in which the Fund has an interest as part of a fungible  mass,  Custodian,  such
Subcustodian,  Depository,  or Foreign  Depository  may select the Securities to
participate in such partial  redemption,  partial payment or other action in any
non-discriminatory manner that it customarily uses to make such selection.

         7. Custodian shall not under any  circumstances  accept bearer interest
coupons  which have been stripped  from United  States  federal,  state or local
government  or agency  securities  unless  explicitly  agreed to by Custodian in
writing.

         8. The Fund  shall be liable  for all  taxes,  assessments,  duties and
other  governmental  charges,  including  any  interest or penalty  with respect
thereto ("Taxes"),  with respect to any cash or Securities held on behalf of the
Fund or any transaction related thereto.  The Fund shall indemnify Custodian and
each  Subcustodian  for  the  amount  of  any  Tax  that  Custodian,   any  such
Subcustodian or any other  withholding  agent is required under  applicable laws
(whether  by  assessment  or  otherwise)  to pay on behalf  of, or in respect of
income earned by or payments or distributions  made to or for the account of the
Fund  (including any payment of Tax required by reason of an earlier  failure to
withhold);  provided  however  that such  indemnification  shall  not  extend to
penalties or interest  resulting solely from  Custodian's  negligence or willful
misconduct.  Custodian  shall, or shall instruct the applicable  Subcustodian or
other  withholding agent to, withhold the amount of any Tax which is required to
be withheld under  applicable law upon  collection of any dividend,  interest or
other  distribution made with respect to any Security and any proceeds or income
from the  sale,  loan or other  transfer  of any  Security.  In the  event  that
Custodian or any Subcustodian is required under applicable law to pay any Tax on
behalf of the Fund,  Custodian is hereby  authorized  to withdraw  cash from any
cash account in the amount  required to pay such Tax and to use such cash, or to
remit such cash to the appropriate  Subcustodian or other withholding agent, for
the timely payment of such Tax in the manner  required by applicable law. If the
aggregate amount of cash in all cash accounts is not sufficient to pay such Tax,
Custodian  shall promptly  notify the Fund of the additional  amount of cash (in
the appropriate  currency)  required,  and the Fund shall directly  deposit such
additional amount in the appropriate cash account promptly after receipt of such
notice,  for use by Custodian as specified  herein.  In the event that Custodian
reasonably believes that Fund is eligible,  pursuant to applicable law or to the
provisions of any tax treaty,  for a reduced rate of, or exemption from, any Tax
which is  otherwise  required to be withheld or paid on behalf of the Fund under
any  applicable  law,   Custodian   shall,  or  shall  instruct  the  applicable
Subcustodian  or withholding  agent to, either  withhold or pay such Tax at such
reduced rate or refrain  from  withholding  or paying such Tax, as  appropriate;
provided  that  Custodian  shall  have  received  from the Fund all  documentary
evidence of residence or other  qualification for such reduced rate or exemption


                                      -7-



required to be received under such  applicable law or treaty.  In the event that
Custodian reasonably believes that a reduced rate of, or exemption from, any Tax
is  obtainable  only by means of an  application  for refund,  Custodian and the
applicable  Subcustodian  shall  have  no  responsibility  for the  accuracy  or
validity  of any  forms  or  documentation  provided  by the  Fund to  Custodian
hereunder.  The Fund hereby agrees to indemnify and hold harmless  Custodian and
each Subcustodian in respect of any liability arising from any  underwithholding
or  underpayment  of any Tax which results from the  inaccuracy or invalidity of
any such forms or other documentation, and such obligation to indemnify shall be
a continuing obligation of the Fund, its successors and assigns  notwithstanding
the termination of this Agreement.

         9. (a) For the purpose of  settling  Securities  and  foreign  exchange
transactions,  the Fund shall  provide  Custodian  with  sufficient  immediately
available funds for all  transactions by such time and date as conditions in the
relevant  market  dictate.  As used herein,  "sufficient  immediately  available
funds" shall mean either (i)  sufficient  cash  denominated  in U.S.  dollars to
purchase the necessary foreign currency,  or (ii) sufficient  applicable foreign
currency,  to settle the  transaction.  Custodian  shall  provide  the Fund with
immediately  available funds each day which result from the actual settlement of
all  sale   transactions,   based  upon  advices   received  by  Custodian  from
Subcustodians,  Depositories,  and Foreign Depositories.  Such funds shall be in
U.S. dollars or such other currency as the Fund may specify to Custodian.

             (b) Any  foreign  exchange  transaction  effected by  Custodian  in
connection  with this  Agreement  may be entered  with  Custodian or a Custodian
Affiliate acting as principal or otherwise  through  customary banking channels.
The Fund may issue a  standing  Certificate  or  Instructions  with  respect  to
foreign exchange transactions,  but Custodian may establish rules or limitations
concerning  any foreign  exchange  facility made available to the Fund. The Fund
shall bear all risks of investing in Securities or holding cash denominated in a
foreign currency.

             (c) To the extent that  Custodian has agreed to provide  pricing or
other  information  services in  connection  with this  Agreement,  Custodian is
authorized to utilize any vendor  (including  brokers and dealers of Securities)
reasonably believed by Custodian to be reliable to provide such information. The
Fund  understands  that  certain  pricing  information  with  respect to complex
financial  instruments  (e.g.,  derivatives) may be based on calculated  amounts
rather than actual market transactions and may not reflect actual market values,
and that the variance  between such calculated  amounts and actual market values
may or may  not be  material.  Where  vendors  do not  provide  information  for
particular  Securities  or other  property,  an  Authorized  Person  may  advise
Custodian in a Certificate  regarding the fair market value of, or provide other
information  with respect to, such Securities or property as determined by it in
good  faith.  Custodian  shall not be liable  for any  loss,  damage or  expense
incurred as a result of errors or omissions with respect to any pricing or other
information utilized by Custodian hereunder.

         10. Until such time as Custodian receives a certificate to the contrary
with respect to a particular Security, Custodian may release the identity of the
Fund to an issuer which requests such  information  pursuant to the  Shareholder
Communications  Act of 1985 for the  specific  purpose of direct  communications
between such issuer and shareholder.


                                      -8-



                                   ARTICLE IV
                        PURCHASE AND SALE OF SECURITIES;
                               CREDITS TO ACCOUNT

         1. Promptly  after each purchase or sale of Securities by the Fund, the
Fund shall deliver to Custodian a Certificate or  Instructions,  or with respect
to a purchase or sale of a Security generally required to be settled on the same
day the purchase or sale is made, Oral  Instructions  specifying all information
Custodian  may  reasonably  request to settle such  purchase or sale.  Custodian
shall account for all purchases and sales of Securities on the actual settlement
date unless otherwise agreed by Custodian.

         2. The Fund  understands  that when  Custodian is instructed to deliver
Securities  against payment,  delivery of such Securities and receipt of payment
therefor may not be completed  simultaneously.  Notwithstanding any provision in
this  Agreement  to  the  contrary,  settlements,  payments  and  deliveries  of
Securities may be effected by Custodian or any  Subcustodian  in accordance with
the  customary  or  established  securities  trading  or  securities  processing
practices and procedures in the  jurisdiction in which the  transaction  occurs,
including,  without  limitation,  delivery to a purchaser or dealer therefor (or
agent) against  receipt with the expectation of receiving later payment for such
Securities.  The Fund  assumes  full  responsibility  for all risks,  including,
without limitation, credit risks, involved in connection with such deliveries of
Securities.

         3. Custodian may, as a matter of bookkeeping convenience or by separate
agreement  with the Fund,  credit the Account with the  proceeds  from the sale,
redemption or other  disposition  of Securities or interest,  dividends or other
distributions payable on Securities prior to its actual receipt of final payment
therefor. All such credits shall be conditional until Custodian's actual receipt
of final  payment  and may be  reversed  by  Custodian  to the extent that final
payment is not  received.  Payment  with  respect to a  transaction  will not be
"final" until  Custodian shall have received  immediately  available funds which
under  applicable  local law,  rule and/or  practice  are  irreversible  and not
subject  to any  security  interest,  levy or other  encumbrance,  and which are
specifically applicable to such transaction.

                                   ARTICLE V
                           OVERDRAFTS OR INDEBTEDNESS

         1. If Custodian  should in its sole discretion  advance funds on behalf
of any Series which results in an overdraft (including,  without limitation, any
day-light  overdraft) because the money held by Custodian in an Account for such
Series shall be  insufficient to pay the total amount payable upon a purchase of
Securities specifically allocated to such Series, as set forth in a Certificate,
Instructions  or Oral  Instructions,  or if an overdraft  arises in the separate
account  of a Series  for some  other  reason,  including,  without  limitation,
because of a reversal of a  conditional  credit or the purchase of any currency,
or if the Fund is for any other reason  indebted to Custodian  with respect to a
Series, including any indebtedness to The Bank of New York under the Fund's Cash
Management and Related Services  Agreement (except a borrowing for investment or
for temporary or emergency purposes using Securities as collateral pursuant to a


                                      -9-



separate  agreement and subject to the provisions of Section 2 of this Article),
such overdraft or indebtedness shall be deemed to be a loan made by Custodian to
the Fund for such Series payable on demand and shall bear interest from the date
incurred  at  a  rate  per  annum   ordinarily   charged  by  Custodian  to  its
institutional  customers,  as such rate may be  adjusted  from time to time.  In
addition,  the Fund hereby  agrees that  Custodian  shall to the maximum  extent
permitted  by law  have a  continuing  lien,  security  interest,  and  security
entitlement  in  and  to  any  property,   including,  without  limitation,  any
investment  property or any financial  asset, of such Series at any time held by
Custodian  for the  benefit of such  Series or in which such  Series may have an
interest which is then in Custodian's  possession or control or in possession or
control of any third party acting in  Custodian's  behalf.  The Fund  authorizes
Custodian,  in its sole discretion,  at any time to charge any such overdraft or
indebtedness  together with interest due thereon  against any balance of account
standing to such Series' credit on Custodian's books.

         2. If the Fund borrows money from any bank (including  Custodian if the
borrowing is pursuant to a separate  agreement)  for investment or for temporary
or emergency purposes using Securities held by Custodian hereunder as collateral
for  such  borrowings,  the  Fund  shall  deliver  to  Custodian  a  Certificate
specifying  with  respect to each such  borrowing:  (a) the Series to which such
borrowing  relates;  (b) the name of the bank,  (c) the amount of the borrowing,
(d) the time and date, if known,  on which the loan is to be entered  into,  (e)
the total amount  payable to the Fund on the borrowing  date, (f) the Securities
to be delivered as collateral  for such loan,  including the name of the issuer,
the title and the  number of shares or the  principal  amount of any  particular
Securities,  and (g) a statement  specifying whether such loan is for investment
purposes  or for  temporary  or  emergency  purposes  and that  such  loan is in
conformance with the `40 Act and the Fund's prospectus.  Custodian shall deliver
on the  borrowing  date  specified in a  Certificate  the  specified  collateral
against  payment by the lending  bank of the total  amount of the loan  payable,
provided that the same conforms to the total amount  payable as set forth in the
Certificate.  Custodian  may,  at the  option  of the  lending  bank,  keep such
collateral in its possession, but such collateral shall be subject to all rights
therein  given  the  lending  bank  by  virtue  of any  promissory  note or loan
agreement.  Custodian shall deliver such Securities as additional  collateral as
may be specified  in a  Certificate  to  collateralize  further any  transaction
described in this  Section.  The Fund shall cause all  Securities  released from
collateral  status to be returned  directly to Custodian,  and  Custodian  shall
receive from time to time such return of collateral as may be tendered to it. In
the event that the Fund fails to specify in a Certificate  the Series,  the name
of the  issuer,  the title and number of shares or the  principal  amount of any
particular  Securities to be delivered as  collateral  by  Custodian,  Custodian
shall not be under any obligation to deliver any Securities.

                                   ARTICLE VI
                          SALE AND REDEMPTION OF SHARES

         1.  Whenever  the  Fund  shall  sell  any  shares  issued  by the  Fund
("Shares")  it  shall  deliver  to  Custodian  a  Certificate  or   Instructions
specifying the amount of money and/or Securities to be received by Custodian for
the sale of such  Shares  and  specifically  allocated  to an  Account  for such
Series.


                                      -10-



         2. Upon receipt of such money,  Custodian shall credit such money to an
Account in the name of the Series for which such money was received.

         3. Except as provided hereinafter,  whenever the Fund desires Custodian
to make payment out of the money held by Custodian  hereunder in connection with
a  redemption  of any Shares,  it shall  furnish to Custodian a  Certificate  or
Instructions  specifying the total amount to be paid for such Shares.  Custodian
shall make payment of such total amount to the transfer agent  specified in such
Certificate  or  Instructions  out  of  the  money  held  in an  Account  of the
appropriate Series.

         4. Notwithstanding the above provisions regarding the redemption of any
Shares,  whenever  any  Shares are  redeemed  pursuant  to any check  redemption
privilege which may from time to time be offered by the Fund, Custodian,  unless
otherwise  instructed by a Certificate or Instructions,  shall, upon presentment
of such check,  charge the amount thereof  against the money held in the Account
of the Series of the Shares being  redeemed,  provided,  that if the Fund or its
agent timely advises  Custodian that such check is not to be honored,  Custodian
shall return such check unpaid.

                                  ARTICLE VII
                      PAYMENT OF DIVIDENDS OR DISTRIBUTIONS

         1. Whenever the Fund shall  determine to pay a dividend or distribution
on Shares it shall furnish to Custodian  Instructions  or a Certificate  setting
forth with respect to the Series  specified  therein the date of the declaration
of such  dividend or  distribution,  the total amount  payable,  and the payment
date.

         2. Upon the payment date specified in such Instructions or Certificate,
Custodian  shall pay out of the money held for the  account  of such  Series the
total amount payable to the dividend agent of the Fund specified therein.

                                  ARTICLE VIII
                              CONCERNING CUSTODIAN

         1. (a) Except as otherwise  expressly provided herein,  Custodian shall
not be liable for any costs, expenses, damages, liabilities or claims, including
attorneys'  and  accountants'  fees  (collectively,  "Losses"),  incurred  by or
asserted  against the Fund,  except those Losses arising out of Custodian's  own
negligence or willful misconduct.  Custodian shall have no liability  whatsoever
for the action or inaction of any  Depositories or of any Foreign  Depositories,
except in each case to the extent such action or inaction is a direct  result of
the  Custodian's  failure to fulfill its duties  hereunder.  With respect to any
Losses  incurred  by the Fund as a result of the acts or any  failures to act by
any  Subcustodian  (other  than a  Custodian  Affiliate),  Custodian  shall take
appropriate  action  to  recover  such  Losses  from  such   Subcustodian;   and
Custodian's  sole  responsibility  and liability to the Fund shall be limited to
amounts so received  from such  Subcustodian  (exclusive  of costs and  expenses
incurred by Custodian). In no event shall Custodian be liable to the Fund or any
third party for special,  indirect or consequential  damages,


                                      -11-



or lost profits or loss of business,  arising in connection with this Agreement,
nor shall Custodian or any Subcustodian be liable:  (i) for acting in accordance
with any  Certificate or Oral  Instructions  actually  received by Custodian and
reasonably  believed by Custodian to be given by an Authorized Person;  (ii) for
acting in accordance with  Instructions  without  reviewing the same;  (iii) for
conclusively  presuming that all  Instructions  are given only by person(s) duly
authorized;  (iv) for  conclusively  presuming  that all  disbursements  of cash
directed  by the Fund,  whether by a  Certificate,  an Oral  Instruction,  or an
Instruction,  are in accordance with Section 2(i) of Article II hereof;  (v) for
holding  property  in any  particular  country,  including,  but not limited to,
Losses  resulting  from  nationalization,  expropriation  or other  governmental
actions;  regulation of the banking or securities industry; exchange or currency
controls or restrictions,  devaluations or fluctuations; availability of cash or
Securities  or market  conditions  which  prevent  the  transfer  of property or
execution of Securities  transactions or affect the value of property;  (vi) for
any Losses due to forces  beyond the  control of  Custodian,  including  without
limitation  strikes,  work  stoppages,  acts of war or terrorism,  insurrection,
revolution,  nuclear or natural  catastrophes or acts of God, or  interruptions,
loss or  malfunctions  of utilities,  communications  or computer  (software and
hardware)  services;  (vii) for the insolvency of any Subcustodian (other than a
Custodian  Affiliate),  any Depository,  or, except to the extent such action or
inaction  is a direct  result of the  Custodian's  failure to fulfill its duties
hereunder,  any Foreign  Depository;  or (viii) for any Losses  arising from the
applicability  of any law or regulation now or hereafter in effect,  or from the
occurrence  of any  event,  including,  without  limitation,  implementation  or
adoption of any rules or procedures of a Foreign  Depository,  which may affect,
limit,   prevent   or  impose   costs  or  burdens   on,  the   transferability,
convertibility,  or availability  of any currency or Composite  Currency Unit in
any  country  or on the  transfer  of any  Securities,  and  in no  event  shall
Custodian be obligated to substitute another currency for a currency  (including
a  currency   that  is  a  component  of  a  Composite   Currency   Unit)  whose
transferability,  convertibility or availability has been affected,  limited, or
prevented by such law, regulation or event, and to the extent that any such law,
regulation or event  imposes a cost or charge upon  Custodian in relation to the
transferability,  convertibility,  or  availability  of  any  cash  currency  or
Composite  Currency  Unit,  such cost or charge  shall be for the account of the
Fund, and Custodian may treat any account denominated in an affected currency as
a group of separate accounts denominated in the relevant component currencies.

             (b)  Custodian  may  enter  into   subcontracts,   agreements   and
understandings  with any  Custodian  Affiliate,  whenever  and on such terms and
conditions  as it  deems  necessary  or  appropriate  to  perform  its  services
hereunder.  No such  subcontract,  agreement or  understanding  shall  discharge
Custodian from its obligations hereunder.

             (c) The Fund  agrees  to  indemnify  Custodian  and hold  Custodian
harmless  from and  against  any and all  Losses  sustained  or  incurred  by or
asserted  against  Custodian  by  reason  of or as a  result  of any  action  or
inaction,  or  arising  out  of  Custodian's  performance  hereunder,  including
reasonable  fees and  expenses of counsel  incurred by Custodian in a successful
defense  of  claims  by the  Fund;  provided  however,  that the Fund  shall not
indemnify  Custodian for those Losses arising out of Custodian's  own negligence
or willful  misconduct.  This indemnity shall be a continuing  obligation of the
Fund,  its  successors  and assigns,  notwithstanding  the  termination  of this
Agreement.


                                      -12-



         2. Without limiting the generality of the foregoing, Custodian shall be
under no obligation to inquire into, and shall not be liable for:

             (a) Any Losses incurred by the Fund or any other person as a result
of the receipt or acceptance of  fraudulent,  forged or invalid  Securities,  or
Securities  which are otherwise not freely  transferable or deliverable  without
encumbrance in any relevant market;

             (b) The validity of the issue of any Securities purchased, sold, or
written  by or for the Fund,  the  legality  of the  purchase,  sale or  writing
thereof, or the propriety of the amount paid or received therefor;

             (c) The legality of the sale or  redemption  of any Shares,  or the
propriety of the amount to be received or paid therefor;

             (d) The legality of the  declaration  or payment of any dividend or
distribution by the Fund;

             (e) The legality of any borrowing by the Fund;

             (f) The  legality of any loan of  portfolio  Securities,  nor shall
Custodian  be  under  any  duty  or  obligation  to see to it that  any  cash or
collateral delivered to it by a broker,  dealer or financial institution or held
by it at any time as a result of such loan of portfolio  Securities  is adequate
security  for the Fund  against  any loss it might  sustain  as a result of such
loan, which duty or obligation shall be the sole  responsibility of the Fund. In
addition, Custodian shall be under no duty or obligation to see that any broker,
dealer or financial  institution to which  portfolio  Securities of the Fund are
lent makes  payment to it of any  dividends or interest  which are payable to or
for the account of the Fund during the period of such loan or at the termination
of such loan, provided, however that Custodian shall promptly notify the Fund in
the event that such dividends or interest are not paid and received when due;

             (g) The  sufficiency  or  value  of any  amounts  of  money  and/or
Securities held in any Special  Account in connection  with  transactions by the
Fund; whether any broker, dealer, futures commission merchant or clearing member
makes payment to the Fund of any  variation  margin  payment or similar  payment
which the Fund may be  entitled to receive  from such  broker,  dealer,  futures
commission  merchant or  clearing  member,  or whether  any payment  received by
Custodian  from any  broker,  dealer,  futures  commission  merchant or clearing
member is the amount the Fund is entitled  to receive,  or to notify the Fund of
Custodian's receipt or non-receipt of any such payment; or

             (h) Whether any  Securities at any time delivered to, or held by it
or by any Subcustodian,  for the account of the Fund and specifically  allocated
to a Series are such as properly  may be held by the Fund or such  Series  under
the  provisions  of its then current  prospectus  and  statement  of  additional
information,  or to ascertain  whether any transactions by the Fund,  whether or
not involving Custodian,  are such transactions as may properly be engaged in by
the Fund.


                                      -13-



         3.  Custodian  may,  with  respect  to  questions  of law  specifically
regarding an Account,  obtain the advice of counsel and shall be fully protected
with respect to anything done or omitted by it in good faith in conformity  with
such advice.

         4. Custodian shall be under no obligation to take action to collect any
amount  payable on  Securities  in default,  or if payment is refused  after due
demand and  presentment.  Custodian shall as promptly as is reasonable under the
circumstances inform the Fund of such default.

         5. Custodian shall have no duty or responsibility to inquire into, make
recommendations,  supervise,  or determine the  suitability of any  transactions
affecting any Account.

         6. The Fund  shall  pay to  Custodian  the fees and  charges  as may be
specifically  agreed  upon from time to time and such other fees and  charges at
Custodian's  standard  rates for such  services as may be  applicable.  The Fund
shall  reimburse  Custodian for all costs  associated with the conversion of the
Fund's  Securities  hereunder and the transfer of Securities and records kept in
connection  with this  Agreement.  The Fund shall also  reimburse  Custodian for
out-of-pocket  expenses  which are a normal  incident of the  services  provided
hereunder.  The Custodian  understands and agrees that XShares Advisors LLC, the
investment  adviser to the Fund (the  "Advisor")  may pay the fees and  expenses
under this  Agreement  directly to the Custodian as a result of its  contractual
arrangements  with the Fund and any such payment by the Advisor  will  discharge
the Fund of its obligations  hereunder.  Notwithstanding  any such arrangements,
nothing  herein  shall be deemed to relieve the Fund of its  obligations  to pay
such fees and expenses if such payment is not made by the Advisor.

         7.  Custodian  has the right to debit any cash  account  for any amount
payable by the Fund in connection  with any and all  obligations  of the Fund to
Custodian. In addition to the rights of Custodian under applicable law and other
agreements,  at any time  when  the  Fund  shall  not  have  honored  any of its
obligations to Custodian,  Custodian  shall have the right without notice to the
Fund to retain or set-off,  against such obligations of the Fund, any Securities
or cash Custodian or a Custodian  Affiliate may directly or indirectly  hold for
the account of the Fund, and any obligations (whether matured or unmatured) that
Custodian  or a  Custodian  Affiliate  may have to the Fund in any  currency  or
Composite  Currency  Unit.  Any such asset of, or obligation to, the Fund may be
transferred  to  Custodian  and any  Custodian  Affiliate in order to effect the
above rights.

         8.  The  Fund  agrees  to  forward  to  Custodian  a   Certificate   or
Instructions  confirming Oral  Instructions by the close of business of the same
day that such Oral Instructions are given to Custodian. The Fund agrees that the
fact that such confirming Certificate or Instructions are not received or that a
contrary Certificate or contrary Instructions are received by Custodian shall in
no way affect the validity or enforceability of transactions  authorized by such
Oral  Instructions  and  effected by  Custodian.  If the Fund elects to transmit
Instructions through an on-line communications system offered by Custodian,  the
Fund's use  thereof  shall be subject to the Terms and  Conditions  attached  as
Appendix I hereto. If Custodian receives Instructions which appear on their face
to have been  transmitted  by an Authorized  Person via (i) computer  facsimile,


                                      -14-



email,  the  Internet  or  other  insecure  electronic  method,  or (ii)  secure
electronic  transmission  containing applicable  authorization codes,  passwords
and/or  authentication  keys,  the Fund  understands  and agrees that  Custodian
cannot determine the identity of the actual sender of such Instructions and that
Custodian shall  conclusively  presume that such Written  Instructions have been
sent by an Authorized  Person,  and the Fund shall be  responsible  for ensuring
that only Authorized  Persons  transmit such  Instructions to Custodian.  If the
Fund elects (with Custodian's prior consent) to transmit Instructions through an
on-line  communications  service  owned or operated by a third  party,  the Fund
agrees that Custodian  shall not be responsible or liable for the reliability or
availability of any such service.

         9. The books and records pertaining to the Fund which are in possession
of Custodian  shall be the property of the Fund. Such books and records shall be
prepared and maintained as required by the `40 Act and the rules thereunder. The
Fund,  or its  authorized  representatives,  shall have access to such books and
records during Custodian's normal business hours. Upon the reasonable request of
the Fund, copies of any such books and records shall be provided by Custodian to
the Fund or its authorized  representative.  Upon the reasonable  request of the
Fund,  Custodian  shall  provide in hard copy or on  computer  disc any  records
included in any such  delivery  which are  maintained by Custodian on a computer
disc, or are similarly maintained.

         10. It is  understood  that  Custodian  is  authorized  to  supply  any
information  regarding the Accounts which is required by any law,  regulation or
rule now or hereafter in effect.  The Custodian  shall provide the Fund with any
report obtained by the Custodian on the system of internal accounting control of
a  Depository,  and with such  reports on its own system of internal  accounting
control as the Fund may reasonably request from time to time.

         11.  Custodian  shall  have no  duties or  responsibilities  whatsoever
except such duties and  responsibilities  as are  specifically set forth in this
Agreement,  and no covenant or obligation shall be implied against  Custodian in
connection with this Agreement.

                                   ARTICLE IX
                                   TERMINATION

         1. Either of the parties  hereto may terminate this Agreement by giving
to the other party a notice in writing  specifying the date of such termination,
which  shall be not less than  ninety (90) days after the date of giving of such
notice.  In the event such notice is given by the Fund, it shall be  accompanied
by a copy of a resolution  of the board of the Fund,  certified by the Secretary
or any Assistant Secretary, electing to terminate this Agreement and designating
a  successor  custodian  or  custodians,  each of which shall be a bank or trust
company having not less than $2,000,000 aggregate capital, surplus and undivided
profits.  In the event such notice is given by Custodian,  the Fund shall, on or
before the termination date,  deliver to Custodian a copy of a resolution of the
board of the  Fund,  certified  by the  Secretary  or any  Assistant  Secretary,
designating  a  successor  custodian  or  custodians.  In the  absence  of  such
designation  by the Fund,  Custodian may designate a successor  custodian  which
shall be a bank or trust  company  having  not less  than  $2,000,000  aggregate
capital,  surplus and undivided profits.  Upon the date set forth in such notice
this Agreement shall terminate,  and Custodian shall upon receipt of a notice of


                                      -15-



acceptance  by the  successor  custodian  on that date  deliver  directly to the
successor  custodian all Securities and money then owned by the Fund and held by
it as Custodian,  after  deducting all fees,  expenses and other amounts for the
payment or reimbursement of which it shall then be entitled.

         2. If a successor  custodian is not designated by the Fund or Custodian
in accordance with the preceding Section, the Fund shall upon the date specified
in the  notice  of  termination  of this  Agreement  and  upon the  delivery  by
Custodian of all Securities  (other than Securities which cannot be delivered to
the Fund) and money then owned by the Fund be deemed to be its own custodian and
Custodian shall thereby be relieved of all duties and responsibilities  pursuant
to this Agreement,  other than the duty with respect to Securities  which cannot
be delivered to the Fund to hold such  Securities  hereunder in accordance  with
this Agreement.


                                   ARTICLE X
                                  MISCELLANEOUS

         1. The Fund  agrees  to  furnish  to  Custodian  a new  Certificate  of
Authorized  Persons  in the event of any change in the then  present  Authorized
Persons.  Until  such new  Certificate  is  received,  Custodian  shall be fully
protected  in acting upon  Certificates  or Oral  Instructions  of such  present
Authorized Persons.

         2. Any notice or other instrument in writing, authorized or required by
this  Agreement  to be  given  to  Custodian,  shall  be  sufficiently  given if
addressed to Custodian and received by it at its offices at One Wall Street, New
York, New York 10286,  or at such other place as Custodian may from time to time
designate in writing.

         3. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Fund shall be sufficiently  given if addressed
to the Fund and  received by it at its offices at ***, or at such other place as
the Fund may from time to time designate in writing.

         4. Each and every right granted to either party  hereunder or under any
other document delivered hereunder or in connection  herewith,  or allowed it by
law or equity,  shall be cumulative  and may be exercised  from time to time. No
failure on the part of either party to exercise, and no delay in exercising, any
right will operate as a waiver thereof,  nor will any single or partial exercise
by either party of any right  preclude any other or future  exercise  thereof or
the exercise of any other right.

         5. In case any provision in or obligation under this Agreement shall be
invalid,  illegal or unenforceable in any exclusive jurisdiction,  the validity,
legality and enforceability of the remaining  provisions shall not in any way be
affected  thereby.  This  Agreement may not be amended or modified in any manner
except  by a  written  agreement  executed  by both  parties,  except  that  any
amendment  to the  Schedule  I hereto  need be  signed  only by the Fund and any
amendment to Appendix I hereto need be signed only by Custodian.  This Agreement
shall  extend  to and  shall be  binding  upon the  parties  hereto,  and  their
respective successors and


                                      -16-



assigns;  provided,  however,  that this  Agreement  shall not be  assignable by
either party without the written consent of the other.

         6. This Agreement shall be construed in accordance with the substantive
laws of the State of New York,  without  regard to conflicts of laws  principles
thereof. The Fund and Custodian hereby consent to the jurisdiction of a state or
federal court situated in New York City, New York in connection with any dispute
arising  hereunder.  The Fund hereby  irrevocably  waives, to the fullest extent
permitted by applicable law, any objection which it may now or hereafter have to
the laying of venue of any such proceeding brought in such a court and any claim
that such proceeding brought in such a court has been brought in an inconvenient
forum. The Fund and Custodian each hereby  irrevocably waives any and all rights
to trial by jury in any legal  proceeding  arising  out of or  relating  to this
Agreement.

         7. The Fund hereby  acknowledges  that  Custodian is subject to federal
laws, including the Customer Identification Program (CIP) requirements under the
USA PATRIOT Act and its  implementing  regulations,  pursuant to which Custodian
must obtain, verify and record information that allows Custodian to identify the
Fund. Accordingly,  prior to opening an Account hereunder Custodian will ask the
Fund to provide certain  information  including,  but not limited to, the Fund's
name,  physical address,  tax  identification  number and other information that
will  help  Custodian  to  identify  and  verify  the  Fund's  identity  such as
organizational documents,  certificate of good standing, license to do business,
or other  pertinent  identifying  information.  The Fund agrees  that  Custodian
cannot open an Account hereunder unless and until Custodian  verifies the Fund's
identity in accordance with its CIP.

         8. This Agreement may be executed in any number of  counterparts,  each
of which  shall be  deemed  to be an  original,  but  such  counterparts  shall,
together, constitute only one instrument.


                                      -17-



         IN WITNESS  WHEREOF,  the Fund and Custodian have caused this Agreement
to be executed by their respective  officers,  thereunto duly authorized,  as of
the day and year first above written.



                                  TDAX FUNDS, INC.




                                  By:   /s/ David W. Jaffin
                                        ----------------------------------------
                                  Title:    CFO and Secretary



                                  THE BANK OF NEW YORK




                                  By:   /s/ Edward G. McGann
                                        ----------------------------------------
                                  Title:    Managing Director



                                      -18-



                                   SCHEDULE I
                        CERTIFICATE OF AUTHORIZED PERSONS
                   (The Fund - Oral and Written Instructions)


         The undersigned hereby certifies that he is the duly elected and acting
Secretary of TDAX Funds,  Inc.  (the  "Fund"),  and further  certifies  that the
following persons,  whether or not an officer or employee of the Fund, have been
duly  authorized in conformity  with the Fund's  Articles of  Incorporation  and
By-Laws to deliver  Certificates and Oral  Instructions,  in accordance with the
resolutions of the Fund's Board to The Bank of New York  ("Custodian")  pursuant
to the Custody Agreement between the Fund and Custodian dated July 24, 2007, and
that the signatures for such persons not affiliated with the Custodian appearing
opposite their names are true and correct:


Anthony F. Dudzinski    Chief Operating Officer
---------------------   ----------------------------     ----------------------
Name                    Title                                  Signature

David W. Jaffin         Secretary and Treasurer
---------------------   ----------------------------     ----------------------
Name                    Title                                  Signature

James J. McCluskey      N/A
---------------------   ----------------------------     ----------------------
Name                    Title                                  Signature

William Vulpis          N/A
---------------------   ----------------------------     ----------------------
Name                    Title                                  Signature

Ivo Ivanov              N/A
---------------------   ----------------------------     ----------------------
Name                    Title                                  Signature




         This certificate  supersedes any certificate of Authorized  Persons you
may currently have on file.


[seal]                                  By:
                                            ----------------------------------
                                             Name:  David  W. Jaffin
                                             Title: Secretary and Treasurer

Date:  July 24, 2007





                                   SCHEDULE II

                                     SERIES

TDAX Independence 2010 Exchange-Traded Fund

TDAX Independence 2020 Exchange-Traded Fund

TDAX Independence 2030 Exchange-Traded Fund

TDAX Independence 2040 Exchange-Traded Fund

TDAX Independence In-Target Exchange-Traded Fund





                                   APPENDIX I

                    ELECTRONIC SERVICES TERMS AND CONDITIONS

         1.  License;  Use.  (a) This  Appendix I shall govern the Fund's use of
electronic  communications,   information  delivery,  portfolio  management  and
banking services, that The Bank of New York and its affiliates ("Custodian") may
provide to the Fund,  such as The Bank of New York  Inform  (TM) and The Bank of
New York CA$H-Register Plus(R), and any computer software,  proprietary data and
documentation  provided  by  Custodian  to  the  Fund  in  connection  therewith
(collectively,  the "Electronic Services"). In the event of any conflict between
the terms of this Appendix I and the main body of this Agreement with respect to
the Fund's use of the  Electronic  Services,  the terms of this Appendix I shall
control.

         (b)  Custodian  grants  to the  Fund a  personal,  nontransferable  and
nonexclusive license to use the Electronic Services to which the Fund subscribes
solely for the purpose of transmitting  instructions  and information  ("Written
Instructions"), obtaining reports, analyses and statements and other information
and data,  making  inquiries  and  otherwise  communicating  with  Custodian  in
connection with the Fund's  relationship with Custodian.  The Fund shall use the
Electronic Services solely for its own internal and proper business purposes and
not in the operation of a service bureau. Except as set forth herein, no license
or right of any kind is granted to with respect to the Electronic Services.  The
Fund  acknowledges  that  Custodian and its suppliers  retain and have title and
exclusive  proprietary  rights to the Electronic  Services,  including any trade
secrets or other  ideas,  concepts,  know-how,  methodologies,  and  information
incorporated  therein and the exclusive  rights to any copyrights,  trade dress,
look and feel, trademarks and patents (including  registrations and applications
for registration of either),  and other legal  protections  available in respect
thereof.  The Fund  further  acknowledges  that all or a part of the  Electronic
Services may be  copyrighted or  trademarked  (or a  registration  or claim made
therefor) by Custodian or its suppliers. The Fund shall not take any action with
respect   to  the   Electronic   Services   inconsistent   with  the   foregoing
acknowledgments,  nor shall the Fund attempt to decompile,  reverse  engineer or
modify the Electronic Services. The Fund may not copy,  distribute,  sell, lease
or  provide,  directly or  indirectly,  the  Electronic  Services or any portion
thereof to any other person or entity without Custodian's prior written consent.
The Fund may not remove any statutory  copyright notice or other notice included
in the  Electronic  Services.  The Fund shall  reproduce  any such notice on any
reproduction  of any  portion  of the  Electronic  Services  and  shall  add any
statutory copyright notice or other notice upon Custodian's request.

         (c) Portions of the Electronic Services may contain, deliver or rely on
data  supplied by third parties  ("Third Party Data"),  such as pricing data and
indicative data, and services supplied by third parties ("Third Party Services")
such as  analytic  and  accounting  services.  Third  Party Data and Third Party
Services supplied hereunder are





obtained  from sources that  Custodian  believes to be reliable but are provided
without any independent investigation by Custodian.  Custodian and its suppliers
do not  represent or warrant  that the Third Party Data or Third Party  Services
are correct,  complete or current. Third Party Data and Third Party Services are
proprietary to their suppliers, are provided solely for the Fund's internal use,
and may not be reused, disseminated or redistributed in any form. The Fund shall
not use any Third  Party Data in any manner that would act as a  substitute  for
obtaining a license for the data directly  from the  supplier.  Third Party Data
and Third Party Services  should not be used in making any investment  decision.
CUSTODIAN AND ITS SUPPLIERS ARE NOT  RESPONSIBLE  FOR ANY RESULTS  OBTAINED FROM
THE  USE  OF OR  RELIANCE  UPON  THIRD  PARTY  DATA  OR  THIRD  PARTY  SERVICES.
Custodian's  suppliers of Third Party Data and Services are intended third party
beneficiaries of this Section 1(c) and Section 5 below.

         (d) The Fund  understands  and agrees that any links in the  Electronic
Services to Internet  sites may be to sites  sponsored  and  maintained by third
parties. Custodian make no guarantees,  representations or warranties concerning
the information  contained in any third party site (including without limitation
that such information is correct,  current, complete or free of viruses or other
contamination),  or any products or services sold through third party sites. All
such links to third party Internet sites are provided solely as a convenience to
the Fund and the Fund  accesses  and uses such sites at its own risk.  A link in
the Electronic  Services to a third party site does not  constitute  Custodian's
endorsement,  authorisation  or  sponsorship  of such site or any  products  and
services available from such site.

         2.  Equipment.  The Fund shall  obtain and maintain at its own cost and
expense all equipment and services,  including but not limited to communications
services,  necessary  for it to  utilize  and  obtain  access to the  Electronic
Services,  and  Custodian  shall  not be  responsible  for  the  reliability  or
availability of any such equipment or services.

         3.  Proprietary   Information.   The  Electronic   Services,   and  any
proprietary data (including Third Party Data), processes,  software, information
and  documentation  made  available  to the Fund (other than which are or become
part of the public  domain or are legally  required to be made  available to the
public)  (collectively,  the "Information"),  are the exclusive and confidential
property of Custodian or its  suppliers.  However,  for the  avoidance of doubt,
reports generated by the Fund containing  information relating to its account(s)
(except for Third Party Data contained  therein) are not deemed to be within the
meaning  of  the  term  "Information."  the  Fund  shall  keep  the  Information
confidential  by using  the same  care and  discretion  that the Fund  uses with
respect to its own  confidential  property and trade secrets,  but not less than
reasonable  care.  Upon  termination  of the  Agreement or the licenses  granted
herein for any reason,  the Fund shall return to Custodian any and all copies of
the  Information  which are in its possession or under its control  (except that
the Fund may retain  reports  containing  Third Party Data,  provided





that such Third Party Data remains  subject to the provisions of this Appendix).
The provisions of this Section 3 shall not affect the copyright status of any of
the  Information  which may be  copyrighted  and shall apply to all  information
whether or not copyrighted.

         4. Modifications. Custodian reserves the right to modify the Electronic
Services  from time to time.  The Fund agrees not to modify or attempt to modify
the Electronic  Services without  Custodian's  prior written  consent.  The Fund
acknowledges that any modifications to the Electronic  Services,  whether by the
Fund or Custodian and whether with or without Custodian's consent,  shall become
the property of Custodian.

         5. NO REPRESENTATIONS OR WARRANTIES; LIMITATION OF LIABILITY. CUSTODIAN
AND ITS MANUFACTURERS AND SUPPLIERS MAKE NO WARRANTIES OR  REPRESENTATIONS  WITH
RESPECT  TO THE  ELECTRONIC  SERVICES  OR ANY THIRD  PARTY  DATA OR THIRD  PARTY
SERVICES,  EXPRESS OR IMPLIED,  IN FACT OR IN LAW,  INCLUDING BUT NOT LIMITED TO
WARRANTIES  OF  MERCHANTABILITY,  NON-INFRINGEMENT  AND FITNESS FOR A PARTICULAR
PURPOSE.  THE FUND ACKNOWLEDGES THAT THE ELECTRONIC  SERVICES,  THIRD PARTY DATA
AND THIRD PARTY SERVICES ARE PROVIDED "AS IS." TO THE FULLEST  EXTENT  PERMITTED
BY APPLICABLE LAW, IN NO EVENT SHALL CUSTODIAN OR ANY SUPPLIER BE LIABLE FOR ANY
DAMAGES, WHETHER DIRECT, INDIRECT SPECIAL, OR CONSEQUENTIAL,  WHICH CUSTOMER MAY
INCUR IN  CONNECTION  WITH THE  ELECTRONIC  SERVICES,  THIRD PARTY DATA OR THIRD
PARTY  SERVICES,  EVEN IF CUSTODIAN OR SUCH SUPPLIER KNEW OF THE  POSSIBILITY OF
SUCH DAMAGES.  IN NO EVENT SHALL CUSTODIAN OR ANY SUPPLIER BE LIABLE FOR ACTS OF
GOD, MACHINE OR COMPUTER  BREAKDOWN OR MALFUNCTION,  INTERRUPTION OR MALFUNCTION
OF  COMMUNICATION  FACILITIES,  LABOR  DIFFICULTIES  OR  ANY  OTHER  SIMILAR  OR
DISSIMILAR CAUSE BEYOND THEIR REASONABLE CONTROL.

         6. Security;  Reliance;  Unauthorized  Use; Funds Transfers.  Custodian
will establish security  procedures to be followed in connection with the use of
the  Electronic  Services,  and the Fund  agrees  to  comply  with the  security
procedures.  The Fund  understands  and agrees that the security  procedures are
intended to determine  whether  instructions  received by Custodian  through the
Electronic  Services are authorized but are not (unless  otherwise  specified in
writing) intended to detect any errors contained in such instructions.  The Fund
will cause all persons  utilizing the Electronic  Services to treat any user and
authorization codes,  passwords,  authentication keys and other security devices
with the highest  degree of care and  confidentiality.  Upon  termination of the
Fund's use of the  Electronic  Services,  the Fund shall return to Custodian any
security devices (e.g., token cards) provided by Custodian.  Custodian is hereby
irrevocably  authorized to comply with and rely upon on Written Instructions and
other  communications,  whether or not  authorized,  received  by it through the
Electronic  Services.  The Fund acknowledges





that it has sole  responsibility  for ensuring that only Authorized  Persons use
the Electronic  Services and that to the fullest extent  permitted by applicable
law  Custodian  shall not be  responsible  nor liable for any  unauthorized  use
thereof or for any losses  sustained by the Fund  arising from or in  connection
with  the use of the  Electronic  Services  or  Custodian's  reliance  upon  and
compliance with Written Instructions and other  communications  received through
the Electronic  Services.  With respect to instructions  for a transfer of funds
issued through the Electronic Services, when instructed to credit or pay a party
by both name and a unique numeric or  alpha-numeric  identifier (e.g. ABA number
or  account  number),  the  Custodian,  its  affiliates,   and  any  other  bank
participating in the funds transfer,  may rely solely on the unique  identifier,
even if it identifies a party different than the party named. Such reliance on a
unique  identifier  shall apply to beneficiaries  named in such  instructions as
well as any financial  institution  which is designated in such  instructions to
act as an  intermediary  in a funds  transfer.  It is understood and agreed that
unless otherwise  specifically  provided herein,  and to the extent permitted by
applicable  law,  the  parties  hereto  shall be bound by the rules of any funds
transfer system utilized to effect a funds transfer hereunder.

         7. Acknowledgments.  Custodian shall acknowledge through the Electronic
Services  its  receipt of each  Written  Instruction  communicated  through  the
Electronic Services,  and in the absence of such acknowledgment  Custodian shall
not be liable for any failure to act in accordance with such Written Instruction
and the Fund may not  claim  that  such  Written  Instruction  was  received  by
Custodian.  Custodian may in its discretion decline to act upon any instructions
or  communications  that are  insufficient  or incomplete or are not received by
Custodian in sufficient  time for  Custodian to act upon, or in accordance  with
such instructions or communications.

         8. Viruses.  The Fund agrees to use  reasonable  efforts to prevent the
transmission  through  the  Electronic  Services  of any  software or file which
contains any viruses,  worms, harmful component or corrupted data and agrees not
to use any device,  software,  or routine to  interfere  or attempt to interfere
with the proper working of the Electronic Services.

         9. Encryption. The Fund acknowledges and agrees that encryption may not
be available for every communication through the Electronic Services, or for all
data. The Fund agrees that  Custodian may deactivate any encryption  features at
any  time,  without  notice  or  liability  to the  Fund,  for  the  purpose  of
maintaining, repairing or troubleshooting its systems.

         10. On-Line Inquiry and Modification of Records. In connection with the
Fund's use of the Electronic  Services,  Custodian  may, at the Fund's  request,
permit the Fund to enter data directly into a Custodian database for the purpose
of modifying certain information  maintained by Custodian's systems,  including,
but not limited to, change of address  information.  To the extent that the Fund
is granted such access, the Fund agrees





to indemnify and hold Custodian harmless from all loss, liability,  cost, damage
and expense  (including  attorney's fees and expenses) to which Custodian may be
subjected or which may be incurred in connection  with any claim which may arise
out of or as a result of changes to Custodian  database records initiated by the
Fund.

         11. Agents.  the Fund may, on advance  written notice to the Custodian,
permit its agents and  contractors  ("Agents") to access and use the  Electronic
Services on the Fund's behalf,  except that the Custodian  reserves the right to
prohibit the Fund's use of any particular  Agent for any reason.  The Fund shall
require  its  Agent(s)  to agree  in  writing  to be  bound by the  terms of the
Agreement,  and the Fund shall be liable and responsible for any act or omission
of such Agent in the same manner,  and to the same extent, as though such act or
omission  were that of the Fund.  Each  submission of a Written  Instruction  or
other   communication  by  the  Agent  through  the  Electronic  Services  shall
constitute a representation and warranty by the Fund that the Agent continues to
be duly  authorized  by the Fund to so act on its behalf and the  Custodian  may
rely on the  representations  and warranties  made herein in complying with such
Written   Instruction  or  communication.   Any  Written  Instruction  or  other
communication  through the Electronic  Services by an Agent shall be deemed that
of the Fund, and the Fund shall be bound thereby whether or not authorized.  The
Fund may, subject to the terms of this Agreement and upon advance written notice
to the Bank,  provide a copy of the Electronic Service user manuals to its Agent
if the Agent requires such copies to use the  Electronic  Services on the Fund's
behalf.  Upon  cessation of any such Agent's  services,  the Fund shall promptly
terminate  such Agent's  access to the  Electronic  Services,  retrieve from the
Agent any copies of the manuals and destroy  them,  and retrieve  from the Agent
any token cards or other security  devices provided by Custodian and return them
to Custodian.





                                                                  Exhibit (g)(2)


                        FOREIGN CUSTODY MANAGER AGREEMENT


         AGREEMENT made as of July 24, 2007, between each mutual fund identified
on Schedule 1 attached  hereto (each, a "Fund";  collectively,  the "Funds") and
The Bank of New York ("BNY").

                              W I T N E S S E T H:

         WHEREAS,  each Fund desires to appoint BNY as a Foreign Custody Manager
on the terms and conditions contained herein;

         WHEREAS,  BNY desires to serve as a Foreign Custody Manager and perform
the duties set forth herein on the terms and conditions contained herein;

         NOW THEREFORE,  in  consideration  of the mutual  promises  hereinafter
contained in this Agreement, each Fund and BNY hereby agrees as follows:

                                    ARTICLE I
                                   DEFINITIONS

         Whenever  used in this  Agreement,  the  following  words and  phrases,
unless the context otherwise requires, shall have the following meanings:

         1. "Board"  shall mean the board of directors or board of trustees,  as
the case may be, of each Fund.

         2. "Eligible Foreign  Custodian" shall have the meaning provided in the
Rule.

         3.  "Monitoring  System"  shall  mean a  system  established  by BNY to
fulfill the  Responsibilities  specified in clauses 1(d) and 1(e) of Article III
of this Agreement.

         4.  "Qualified  Foreign  Bank" shall have the  meaning  provided in the
Rule.

         5. "Responsibilities" shall mean the responsibilities  delegated to BNY
as a Foreign  Custody  Manager with respect to each  Specified  Country and each
Eligible Foreign Custodian  selected by BNY, as such  responsibilities  are more
fully described in Article III of this Agreement.

         6.  "Rule"  shall mean Rule 17f-5 under the  Investment  Company Act of
1940, as amended from time to time.

         7.  "Securities  Depository"  shall mean any  securities  depository or
clearing agency within the meaning of Rule 17f-7.



                                       2

         8.  "Specified  Country"  shall mean each country  listed on Schedule 2
attached hereto and each country, other than the United States, constituting the
primary  market for a security with respect to which the relevant Fund has given
settlement  instructions to The Bank of New York as custodian (the  "Custodian")
under its Custody Agreement with such Fund.

                                   ARTICLE II
                        BNY AS A FOREIGN CUSTODY MANAGER

         1.  Each  Fund on behalf  of its  Board  hereby  delegates  to BNY with
respect to each Specified Country the Responsibilities.

         2. BNY accepts each Fund's Board's delegation of Responsibilities  with
respect to each Specified Country and agrees in performing the  Responsibilities
as a Foreign Custody Manager to exercise reasonable care, prudence and diligence
such as a person having  responsibility for the safekeeping of the Fund's assets
would exercise.

         3. BNY shall  provide to each  Board at such  times as the Board  deems
reasonable and  appropriate  based on the  circumstances  of the relevant Fund's
foreign  custody  arrangements  written  reports  notifying  the  Board  of  the
placement of assets of the Fund with a  particular  Eligible  Foreign  Custodian
within a  Specified  Country  and of any  material  change  in the  arrangements
(including,  in the case of Qualified  Foreign Banks, any material change in any
contract governing such arrangements and in the case of Securities Depositories,
any  material  change  in  the  established  practices  or  procedures  of  such
Securities  Depositories)  with  respect  to  assets  of the Fund  with any such
Eligible Foreign Custodian.

                                   ARTICLE III
                                RESPONSIBILITIES

         1. Subject to the provisions of this Agreement,  BNY shall with respect
to each Specified  Country select an Eligible Foreign  Custodian.  In connection
therewith,  BNY  shall:  (a)  determine  that  assets of the Funds  held by such
Eligible  Foreign  Custodian  will be subject to reasonable  care,  based on the
standards applicable to custodians in the relevant market in which such Eligible
Foreign  Custodian  operates,  after  considering  all  factors  relevant to the
safekeeping of such assets,  including,  without limitation,  those contained in
paragraph  (c)(1) of the Rule;  (b) determine  that the Funds'  foreign  custody
arrangements with each Qualified Foreign Bank are governed by a written contract
with the  Custodian  (or,  in the  case of a  Securities  Depository,  by such a
contract,  by the rules or established practices or procedures of the Securities
Depository,  or  by  any  combination  of  the  foregoing)  which  will  provide
reasonable  care for the  Funds'  assets  based on the  standards  specified  in
paragraph  (c)(1) of the Rule; (c) determine that each contract with a Qualified
Foreign Bank shall include the  provisions  specified in paragraph  (c)(2)(i)(A)
through  (F) of the  Rule  or,  alternatively,  in  lieu  of any or all of  such
(c)(2)(i)(A)  through (F)  provisions,  such other  provisions as BNY determines
will  provide,  in  their  entirety,  the  same or a  greater  level of care and
protection for the assets of the Funds as such specified provisions; (d) monitor
pursuant to the Monitoring System the  appropriateness of maintaining the assets
of the Funds with a particular  Eligible Foreign Custodian pursuant to paragraph
(c)(1) of the Rule and


                                       3


in the case of a Qualified  Foreign  Bank,  any material  change in the contract
governing  such  arrangement  and in the case of a  Securities  Depository,  any
material  change in the  established  practices or procedures of such Securities
Depository;  and (e) advise the Funds whenever an arrangement (including, in the
case of a Qualified Foreign Bank, any material change in the contract  governing
such arrangement and in the case of a Securities Depository, any material change
in the  established  practices  or  procedures  of such  Securities  Depository)
described in preceding  clause (d) no longer meets the requirements of the Rule.
Anything in this  Agreement  to the  contrary  notwithstanding,  BNY shall in no
event be deemed to have selected any  Securities  Depository the use of which is
mandatory by law or regulation or because  securities  cannot be withdrawn  from
such  Securities  Depository,  or because  maintaining  securities  outside  the
Securities  Depository is not consistent with prevailing  custodial practices in
the relevant  market (each,  a  "Compulsory  Depository");  it being  understood
however, that for each Compulsory Depository utilized or intended to be utilized
by the  Funds,  BNY may  provide  the Funds  from time to time with  information
addressing  the  factors  set  forth in  Section  (c)(1)  of the Rule and  BNY's
opinions with respect  thereto in order to assist the Funds in  determining  the
appropriateness of placing Fund assets therein.

         2. (a) For  purposes of Clauses (a) and (b) of  preceding  Section 1 of
this Article,  with respect to Securities  Depositories,  it is understood  that
such  determination  shall be made on the basis of,  and  limited  by,  publicly
available information with respect to each such Securities Depository.

         (b) For purposes of clause (d) of preceding  Section 1 of this Article,
BNY's  determination  of  appropriateness  shall not  include,  nor be deemed to
include,  any  evaluation  of Country  Risks  associated  with  investment  in a
particular  country.  For purposes  hereof,  "Country Risks" shall mean systemic
risks of holding assets in a particular country  including,  but not limited to,
(a)  the  use  of  Compulsory   Depositories,   (b)  such  country's   financial
infrastructure,  (c) such country's prevailing custody and settlement practices,
(d) nationalization, expropriation or other governmental actions, (e) regulation
of the banking or  securities  industry,  (f) currency  controls,  restrictions,
devaluations or fluctuations, and (g) market conditions which affect the orderly
execution of securities transactions or affect the value of securities.

                                   ARTICLE IV
                                 REPRESENTATIONS

         1. Each Fund hereby  represents  that: (a) this Agreement has been duly
authorized,  executed and delivered by the Fund, constitutes a valid and legally
binding  obligation of the Fund enforceable in accordance with its terms, and no
statute,  regulation,  rule,  order,  judgment or  contract  binding on the Fund
prohibits  the Fund's  execution  or  performance  of this  Agreement;  (b) this
Agreement  has been  approved and ratified by the Fund's Board at a meeting duly
called and at which a quorum was at all times present;  and (c) the Fund's Board
or its  investment  advisor has  considered  the Country Risks  associated  with
investment in each Specified  Country and will have  considered such risks prior
to any settlement  instructions being given to the Custodian with respect to any
other Specified Country.



                                       4


         2. BNY hereby  represents  that: (a) BNY is duly organized and existing
under  the  laws of the  State  of New  York,  with  full  power to carry on its
businesses as now conducted, and to enter into this Agreement and to perform its
obligations hereunder; (b) this Agreement has been duly authorized, executed and
delivered by BNY,  constitutes  a valid and legally  binding  obligation  of BNY
enforceable  in accordance  with its terms,  and no statute,  regulation,  rule,
order,  judgment  or  contract  binding  on BNY  prohibits  BNY's  execution  or
performance  of this  Agreement;  and (c) BNY  has  established  the  Monitoring
System.

                                    ARTICLE V
                                 CONCERNING BNY

         1.  BNY  shall  not  be  liable  for  any  costs,  expenses,   damages,
liabilities or claims,  including attorneys' and accountants' fees, sustained or
incurred by, or asserted against,  any Fund except to the extent the same arises
out of the failure of BNY to exercise the care,  prudence and diligence required
by Section 2 of Article II hereof.  In no event shall BNY be liable to any Fund,
such Fund's  Board,  or any third party for special,  indirect or  consequential
damages,  or for lost profits or loss of business,  arising in  connection  with
this Agreement.

         2. Each Fund shall  indemnify BNY and hold it harmless from and against
any  and  all  costs,  expenses,  damages,   liabilities  or  claims,  including
attorneys' and accountants' fees, sustained or incurred by, or asserted against,
BNY by reason or as a result of any action or inaction,  or arising out of BNY's
performance  hereunder,  provided that no Fund shall indemnify BNY to the extent
any such costs,  expenses,  damages,  liabilities  or claims  arise out of BNY's
failure to exercise the  reasonable  care,  prudence and  diligence  required by
Section 2 of Article II hereof.

         3. For its  services  hereunder,  each  Fund  agrees to pay to BNY such
compensation  and  out-of-pocket  expenses  as shall  be  mutually  agreed.  BNY
understands and agrees that XShares Advisors LLC, the investment  adviser to the
Fund (the "Advisor") may pay the fees and expenses under this Agreement directly
to BNY as a result of its  contractual  arrangements  with the Fund and any such
payment by the Advisor will  discharge  the Fund of its  obligations  hereunder.
Notwithstanding any such arrangements, nothing herein shall be deemed to relieve
the Fund of its obligations to pay such fees and expenses if such payment is not
made by the Advisor.

         4. BNY shall have only such duties as are  expressly  set forth herein.
In no  event  shall  BNY  be  liable  for  any  Country  Risks  associated  with
investments in a particular country.

                                   ARTICLE VI
                                  MISCELLANEOUS

         1. This Agreement  constitutes the entire  agreement  between each Fund
and BNY,  and no provision  in the Custody  Agreement  between such Fund and the
Custodian  shall affect the duties and  obligations of BNY hereunder,  nor shall
any  provision  in this  Agreement  affect  the  duties  or  obligations  of the
Custodian under the Custody Agreement.



                                       5


         2. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to BNY, shall be sufficiently given if received by it
at its offices at 100 Church Street,  New York, New York 10286, or at such other
place as BNY may from time to time designate in writing.

         3. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to a Fund shall be sufficiently  given if received by
it at its offices at 420  Lexington  Ave,  Suite 2550,  New York, NY 10170 or at
such other place as the Fund may from time to time designate in writing.

         4. In case any provision in or obligation under this Agreement shall be
invalid,  illegal or unenforceable in any jurisdiction,  the validity,  legality
and enforceability of the remaining  provisions shall not in any way be affected
thereby. This Agreement may not be amended or modified in any manner except by a
written  agreement  executed by the relevant Fund and BNY. This Agreement  shall
extend to and shall be binding  upon the parties  hereto,  and their  respective
successors  and assigns;  provided  however,  that this  Agreement  shall not be
assignable by any Fund or BNY without the written consent of BNY or the relevant
Fund.

         5. This Agreement shall be construed in accordance with the substantive
laws of the State of New York,  without  regard to conflicts of laws  principles
thereof.  Each Fund and BNY 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.  Each Fund hereby  irrevocably  waives, to the fullest extent
permitted by applicable law, any objection which it may now or hereafter have to
the laying of venue of any such proceeding brought in such a court and any claim
that such proceeding brought in such a court has been brought in an inconvenient
forum.  Each Fund and BNY each hereby  irrevocably  waives any and all rights to
trial  by  jury in any  legal  proceeding  arising  out of or  relating  to this
Agreement.

         6. The parties hereto agree that in performing hereunder, BNY is acting
solely on behalf of the relevant Fund and no contractual or service relationship
shall be deemed to be established hereby between BNY and any other person.

         7. This Agreement may be executed in any number of  counterparts,  each
of which  shall be  deemed  to be an  original,  but  such  counterparts  shall,
together, constitute only one instrument.

         8.  This   Agreement   shall   terminate   with  respect  to  any  Fund
simultaneously  with the termination of the Custody  Agreement between such Fund
and the  Custodian,  and may otherwise be terminated by a Fund (as to such Fund)
or BNY upon not less than thirty (30) days prior written notice.




                                       6


         IN WITNESS  WHEREOF,  each Fund and BNY has caused this Agreement to be
executed by their respective officers, thereunto duly authorized, as of the date
first above written.


                                  TDAX FUNDS, INC.
                                  on behalf of each Fund listed on Schedule 1



                                  By:   /s/ David W. Jaffin
                                        ----------------------------------------
                                  Title:    CFO and Secretary



                                  THE BANK OF NEW YORK




                                  By:   /s/ Edward G. McGann
                                        ----------------------------------------
                                  Title:    Managing Director



fcmstd3.doc
(10-99)





                                                                  Exhibit (g)(2)

                                   SCHEDULE 1

Name of Fund
------------

TDAX Independence 2010 Exchange-Traded Fund

TDAX Independence 2020 Exchange-Traded Fund

TDAX Independence 2030 Exchange-Traded Fund

TDAX Independence 2040 Exchange-Traded Fund

TDAX Independence In-Target Exchange-Traded Fund





                                                                  Exhibit (g)(2)


                                   SCHEDULE 2





Australia

Belgium

Canada

Finland

France

Germany

Italy

Japan

Netherlands

Spain

Sweden

Switzerland

UK

US






                                                                  Exhibit (h)(1)


                  FUND ADMINISTRATION AND ACCOUNTING AGREEMENT
                  --------------------------------------------


         AGREEMENT  made as of July 24, 2007,  by and between each entity listed
on Exhibit A hereto (each a "Fund",  collectively the "Funds"),  and The Bank of
New York, a New York banking organization ("BNY").

                              W I T N E S S E T H :
                               - - - - - - - - - -

         WHEREAS,  each  Fund is an  investment  company  registered  under  the
Investment Company Act of 1940, as amended (the "1940 Act"); and

         WHEREAS,  each Fund desires to retain BNY to provide for the portfolios
identified on Exhibit A hereto (each, a "Series") the services described herein,
and BNY is willing to provide such services, all as more fully set forth below;

         NOW, THEREFORE,  in consideration of the mutual promises and agreements
contained herein, the parties hereby agree as follows:

         1. Appointment.

         Each  Fund  hereby  appoints  BNY as its  agent  for  the  term of this
Agreement  to perform the services  described  herein.  BNY hereby  accepts such
appointment and agrees to perform the duties hereinafter set forth.

         2. Representations and Warranties.

         (a)  Each  Fund  hereby   represents   and   warrants  to  BNY,   which
representations and warranties shall be deemed to be continuing, that:

                  (i) It is duly  organized  and existing  under the laws of the
                  jurisdiction of its organization,  with full power to carry on
                  its business as now  conducted,  to enter into this  Agreement
                  and to perform its obligations hereunder;

                  (ii) This  Agreement  has been duly  authorized,  executed and
                  delivered by the Fund in accordance with all requisite  action
                  and constitutes a valid and legally binding  obligation of the
                  Fund, enforceable in accordance with its terms;



                  (iii) It is  conducting  its business in  compliance  with all
                  applicable laws and regulations,  both state and federal,  and
                  has obtained all regulatory  licenses,  approvals and consents
                  necessary to carry on its business as now conducted;  there is
                  no statute,  regulation, rule, order or judgment binding on it
                  and  no  provision  of  its  charter  or  by-laws,  nor of any
                  mortgage,   indenture,  credit  agreement  or  other  contract
                  binding on it or affecting its property  which would  prohibit
                  its execution or performance of this Agreement;

                  (iv) To the extent  the  performance  of any of the  valuation
                  services  or  other  computations  described  in  Schedule  II
                  attached  hereto by BNY in accordance  with the then effective
                  Prospectus  (as  hereinafter  defined) for the Fund or pricing
                  policies  adopted by the Board would  violate  any  applicable
                  laws or regulations,  the Fund shall immediately so notify BNY
                  in writing and  thereafter  shall either  furnish BNY with the
                  appropriate  values of  securities,  net asset  value or other
                  computation,  as the case may be,  or,  subject  to the  prior
                  approval of BNY,  instruct BNY in writing to value  securities
                  and/or  compute  net asset  value or other  computations  in a
                  manner  the  Fund   specifies  in  writing,   and  either  the
                  furnishing  of such values or the giving of such  instructions
                  shall constitute a representation by the Fund that the same is
                  consistent  with all applicable  laws and regulations and with
                  its Prospectus; and

                  (v)      It has implemented, and is acting in accordance with,
                           procedures reasonably designed to ensure that it will
                           disseminate  to all market  participants,  other than
                           Authorized Participants (as defined in its Prospectus
                           and  Statement  of  Additional   Information),   each
                           calculation  of  net  asset  value  provided  by  BNY
                           hereunder to Authorized Participants.


              (b)  BNY  hereby  represents  and  warrants  to  the  Fund,  which
representations and warranties shall be deemed to be continuing, that:


                                     - 2 -



                  (i) It is duly  organized  and existing  under the laws of the
                  jurisdiction of its organization,  with full power to carry on
                  its business as now  conducted,  to enter into this  Agreement
                  and to perform its obligations hereunder.

                  (ii) This  Agreement  has been duly  authorized,  executed and
                  delivered by BNY in accordance  with all  requisite  action of
                  its governing body and constitutes a valid and legally binding
                  obligation of BNY enforceable in accordance with its terms.

                  (iii) To the best of BNY's knowledge,  information and belief,
                  it is conducting its business in material  compliance with all
                  applicable  laws  and  regulations  insofar  as such  laws and
                  regulations  apply to the services being provided by BNY under
                  this  Agreement  and has  obtained  all  regulatory  licenses,
                  approvals  and  consents   necessary  for  its  execution  and
                  performance   of  this   Agreement;   there  is  no   statute,
                  regulation,  rule,  order  or  judgment  binding  on it and no
                  provision of its organizational and governing  documents,  nor
                  of any mortgage, indenture, credit agreement or other contract
                  binding on it or affecting  its property  which would  prevent
                  its execution or performance of this Agreement.

                  (iv) It will maintain personnel and infrastructure appropriate
                  to enable it to perform its obligations hereunder.


         3. Delivery of Documents.

                  (a) Each Fund will  promptly  deliver to BNY true and  correct
copies of each of the  following  documents  as  currently  in  effect  and will
promptly deliver to it all future amendments and supplements thereto, if any:

                           (i) The Fund's  articles  of  incorporation  or other
organizational document and all amendments thereto (the "Charter");

                           (ii) The Fund's bylaws (the "Bylaws");

                           (iii) Resolutions of the Fund's board of directors or
other  governing


                                     - 3 -



body (the "Board")  authorizing the execution,  delivery and performance of this
Agreement by the Fund;

                           (iv) The Fund's registration  statement most recently
filed with the Securities and Exchange  Commission  (the "SEC")  relating to the
shares of the Fund (the "Registration Statement");

                           (v) The Fund's Notification of Registration under the
1940 Act on Form N-8A filed with the SEC; and

                           (vi)  The  Fund's   Prospectus   and   Statement   of
Additional   Information   pertaining   to  each   Series   (collectively,   the
"Prospectus").

                  (b)  Each  copy  of the  Charter  shall  be  certified  by the
Secretary of State (or other appropriate official) of the state of organization,
and if the  Charter is  required  by law also to be filed with a county or other
officer or official  body,  a  certificate  of such filing shall be filed with a
certified copy submitted to BNY. Each copy of the Bylaws, Registration Statement
and Prospectus,  and all amendments  thereto,  and copies of Board  resolutions,
shall be certified by the Secretary or an Assistant Secretary of the appropriate
Fund.

                  (c) It  shall  be the  sole  responsibility  of  each  Fund to
deliver to BNY its currently effective Prospectus and BNY shall not be deemed to
have notice of any information contained in such Prospectus until it is actually
received by BNY.

         4. Duties and Obligations of BNY.

                  (a) Subject to the  direction and control of each Fund's Board
and the  provisions  of this  Agreement,  BNY shall provide to each Fund (i) the
administrative  services  set forth on  Schedule I attached  hereto and (ii) the
valuation,  accounting and  computation  services listed on Schedule II attached
hereto.

                  (b)  In  performing  hereunder,  BNY  shall  provide,  at  its
expense,  office space,  facilities,  equipment and personnel  necessary for the
performance of its duties hereunder.

                  (c) BNY shall not provide any  services  under this  Agreement
relating to the management, investment advisory or sub-advisory functions of any
Fund,  distribution of shares of any Fund,  maintenance of any Fund's  financial
records (except to the extent such financial


                                     - 4 -



records  are  generated  by BNY in the course of the  performance  of its duties
hereunder,  in which case BNY will preserve and retain such records on behalf of
the Fund in accordance with BNY's record  retention  policies and procedures) or
other  services  normally   performed  by  the  Funds'  respective   counsel  or
independent auditors.

                  (d) Upon  receipt of a Fund's  prior  written  consent  (which
shall not be  unreasonably  withheld),  BNY may  delegate  any of its duties and
obligations  hereunder  to any delegee or agent  whenever  and on such terms and
conditions as it deems necessary or appropriate.  Notwithstanding the foregoing,
no  Fund  consent  shall  be  required  for any  such  delegation  to any  other
subsidiary  of The  Bank of New York  Company,  Inc..  Notwithstanding  any such
delegation,  and  irrespective  of  whether  or not the  consent of the Funds is
required (or has been  obtained) for such  delegation,  BNY shall be responsible
for the  reasonable  selection  of any such  delegee or agent,  and shall not be
discharged  of its duties to provide the  delegated  services.  BNY shall not be
liable to any Fund for any loss or damage arising out of, or in connection with,
the actions or  omissions to act of any delegee or agent  utilized  hereunder so
long as BNY acts in good faith and without  negligence  or wilful  misconduct in
the selection of such delegee or agent.

                  (e) Each Fund shall  cause its  officers,  advisors,  sponsor,
distributor,  legal counsel, independent accountants,  current administrator (if
any),  transfer agent,  and any other service provider to cooperate with BNY and
to provide  BNY,  upon  request,  with such  information,  documents  and advice
relating to such Fund as is within the  possession or knowledge of such persons,
and which in the opinion of BNY, is  necessary  in order to enable it to perform
its  duties  hereunder.  BNY shall  not be  responsible  for,  under any duty to
inquire into, or be deemed to make any assurances  with respect to the accuracy,
validity or propriety of any information, documents or advice provided to BNY by
any of the aforementioned  persons. BNY shall not be liable for any loss, damage
or expense resulting from or arising out of the failure of the Fund to cause any
information,  documents  or advice to be provided to BNY as provided  herein and
shall be held  harmless  by each Fund when  acting in good faith and in reliance
upon such  information,  documents or advice  relating to such Fund. All fees or
costs  charged by such persons  shall be borne by the  appropriate  Fund. In the
event that any services  performed by BNY  hereunder  rely, in whole or in part,
upon  information  obtained from a third party service utilized


                                     - 5 -



or subscribed to by BNY which BNY in good faith and in its  reasonable  judgment
deems reliable,  BNY shall not have any  responsibility  or liability for, under
any duty to inquire into, or deemed to make any assurances  with respect to, the
accuracy or completeness of such information.

                  (f) Nothing in this Agreement shall limit or restrict BNY, any
affiliate of BNY or any officer or employee  thereof from acting for or with any
third parties, and providing services similar or identical to same or all of the
services provided hereunder.

                  (g) Subject to the  provisions  of this  Agreement,  BNY shall
compute the net asset value per share of the Fund and shall value the securities
held by the Fund at such times and dates and in the manner specified in the then
currently  effective  Prospectus of the Fund,  except that  notwithstanding  any
language in the Prospectus,  in no event shall BNY be required to determine,  or
have any obligations with respect to, whether a market price represents any fair
or true value,  nor to adjust any price to reflect any events or  announcements,
including,  without  limitation,  those with respect to the issuer  thereof,  it
being agreed that all such determinations and considerations shall be solely the
responsibility  of the Fund.  BNY shall provide a report of such net asset value
to the Fund and Authorized  Participants  at the  respective  times set forth in
Schedule II, as amended from time to time. To the extent valuation of securities
or  computation  of a net asset value as specified in the Fund's then  currently
effective  Prospectus is at any time  inconsistent  with any applicable  laws or
regulations,  the Fund shall immediately so notify BNY in writing and thereafter
shall  either  furnish  BNY at all  appropriate  times  with the  values of such
securities  and the Fund's net asset value,  or subject to the prior approval of
BNY,  instruct BNY in writing to value securities and compute net asset value in
a manner which the Fund then  represents  in writing to be  consistent  with all
applicable laws and regulations. The Fund may also from time to time, subject to
the prior  approval of BNY,  instruct BNY in writing to compute the value of the
securities  or net  asset  value in a manner  other  than as  specified  in this
paragraph.  By  giving  such  instruction,  the  Fund  shall be  deemed  to have
represented  that such  instruction is consistent  with all applicable  laws and
regulations  and the then currently  effective  Prospectus of the Fund. The Fund
shall  have sole  responsibility  for  determining  the method of  valuation  of
securities and the method of computing net asset value.



                                     - 6 -



                  (h) Each Fund shall furnish BNY with any and all instructions,
explanations,  information, specifications and documentation deemed necessary by
BNY in the performance of its duties hereunder,  including,  without limitation,
the amounts or written  formula for calculating the amounts and times of accrual
of Fund  liabilities and expenses.  BNY shall not be required to include as Fund
liabilities and expenses, nor as a reduction of net asset value, any accrual for
any federal, state, or foreign income taxes unless the Fund shall have specified
to BNY the precise amount of the same to be included in liabilities and expenses
or used to reduce net asset  value.  Each Fund shall also  furnish BNY with bid,
offer,  or market  values of  Securities if BNY notifies such Fund that same are
not available to BNY from a security  pricing or similar  service  utilized,  or
subscribed  to, by BNY which BNY in its judgment deems reliable at the time such
information is required for calculations hereunder. At any time and from time to
time,  the Fund also may  furnish  BNY with  bid,  offer,  or  market  values of
Securities  and  instruct  BNY  to use  such  information  in  its  calculations
hereunder. BNY shall at no time be required or obligated to commence or maintain
any utilization of, or subscriptions  to, any particular  securities  pricing or
similar service.

                  (i) BNY may apply to an  officer or duly  authorized  agent of
any  Fund for  written  instructions  with  respect  to any  matter  arising  in
connection with BNY's performance  hereunder for such Fund, and BNY shall not be
liable  for any  action  taken or  omitted  to be  taken by it in good  faith in
accordance with such instructions. Such application for instructions may, at the
option of BNY,  set forth in writing any action  proposed to be taken or omitted
to be taken  by BNY  with  respect  to its  duties  or  obligations  under  this
Agreement and the date on and/or after which such action shall be taken, and BNY
shall not be liable  for any action  taken or omitted to be taken in  accordance
with a proposal  included in any such application on or after the date specified
therein  unless,  prior to taking or omitting to take any such  action,  BNY has
received  written  instructions in response to such  application  specifying the
action to be taken or omitted.

                  (j) BNY may consult  with counsel to the  appropriate  Fund at
such Fund's expense,  or its own counsel at its own expense,  provided that such
counsel has been approved by the Fund,  where notice from BNY as to its selected
counsel  which is not objected to in writing by the Fund within one business day
shall  constitute  the Fund's  approval,  and BNY shall be fully


                                     - 7 -



protected  with  respect  to  anything  done or  omitted  by it in good faith in
accordance with the advice or opinion of such counsel.

                  (k)  Notwithstanding  any other  provision  contained  in this
Agreement  or  Schedule  I or II  attached  hereto,  BNY  shall  have no duty or
obligation  to with  respect  to,  including,  without  limitation,  any duty or
obligation to determine, or advise or notify any Fund of: (i) the taxable nature
of any  distribution  or amount received 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,  tax refunds or similar events,
(iii) the taxable nature or taxable amount of any distribution or dividend paid,
payable or deemed paid, by a Fund to its shareholders;  or (iv) the effect under
any federal,  state,  or foreign  income tax laws of a Fund making or not making
any distribution or dividend payment, or any election with respect thereto.

                  (l) With respect to the services contemplated  hereunder,  BNY
shall  have no duties or  responsibilities  whatsoever  except  such  duties and
responsibilities as are specifically set forth in this Agreement and Schedules I
and II attached hereto.

                  (m) BNY, in performing  the services  required of it under the
terms of this  Agreement,  shall be entitled to rely fully on the  accuracy  and
validity of any and all instructions,  explanations, information, specifications
and documentation furnished to it by a Fund and shall have no duty or obligation
to  review  the   accuracy,   validity  or  propriety   of  such   instructions,
explanations,  information,  specifications or documentation, including, without
limitation,  evaluations of Securities;  the amounts or formula for  calculating
the  amounts  and times of accrual  of Series'  liabilities  and  expenses;  the
amounts  receivable  and  the  amounts  payable  on  the  sale  or  purchase  of
Securities; and amounts receivable or amounts payable for the sale or redemption
of  Fund  shares  effected  by or on  behalf  of a  Fund.  In  the  event  BNY's
computations  hereunder rely, in whole or in part, upon information,  including,
without  limitation,  bid, offer or market values of Securities or other assets,
or accruals of interest or earnings  thereon,  from a pricing or similar service
utilized, or subscribed to, by BNY which BNY in its judgment deems reliable, and
which is  consistent  with the  pricing  policies  as  adopted  by the Board and
provided to BNY,  BNY shall not be  responsible  for,  under any duty to inquire
into,  or deemed  to make any  assurances  with  respect  to,  the  accuracy  or
completeness  of  such  information.  Without  limiting



                                     - 8 -


the generality of the  foregoing,  BNY shall not be required to inquire into any
valuation of securities  or other assets by a Fund or any third party  described
in this (m) even  though BNY in  performing  services  similar  to the  services
provided pursuant to this Agreement for others may receive different  valuations
of the same or different securities of the same issuers.

                  (n) BNY, in performing  the services  required of it under the
terms of this Agreement,  shall not be responsible  for determining  whether any
interest  accruable to a Fund is or will be actually  paid, but will accrue such
interest until otherwise instructed by such Fund.

                  (o) BNY shall not be  responsible  for delays or errors  which
occur by reason of  circumstances  beyond its control in the  performance of its
duties under this Agreement,  including,  without limitation, labor difficulties
within or without BNY, mechanical breakdowns, flood or catastrophe, acts of God,
failures of transportation,  interruptions,  loss, or malfunctions of utilities,
communications  or computer  (hardware or software)  services.  Nor shall BNY be
responsible  for  delays or  failures  to supply  the  information  or  services
specified  in this  Agreement  where such delays or  failures  are caused by the
failure of any person(s) other than BNY, its employees or or its affiliates,  to
supply  any   instructions,   explanations,   information,   specifications   or
documentation  deemed in good faith to be necessary by BNY in the performance of
its duties under this  Agreement.  BNY will in such  instances as promptly as is
reasonable under the circumstances notify the Fund of such failures.

(o) BNY shall keep  confidential all books and records relating to the Funds and
its  shareholders,  except when (i)  disclosure  is required by law, (ii) BNY is
advised by counsel that it may incur liability for failure to make a disclosure,
(iii) BNY is  requested  to divulge such  information  by a court,  governmental
agency or  entity  or by a  self-regulatory  organization  registered  under the
Securities  Exchange Act of 1934, or (iv) as requested or authorized by Funds or
the  Advisor  (including   pursuant  to  this  Agreement  or  its  policies  and
procedures).  BNY shall  provide  the Funds with  reasonable  advance  notice of
disclosure pursuant to items (i) - (iii) of the previous sentence, to the extent
reasonably  practicable  and  permissible  by law. BNY shall  promptly  upon the
Funds' demand, turn over to the Funds and cease to retain the files, records and
documents  created and maintained by it pursuant to this Agreement  which are no
longer


                                     - 9 -



needed by it in the  performance of its services or in accordance  with relevant
law, regulation, or bank policy.

         5. Allocation of Expenses.

         Except as otherwise  provided herein, all costs and expenses arising or
incurred in connection  with the  performance of this Agreement shall be paid by
the appropriate  Fund,  including but not limited to,  organizational  costs and
costs of maintaining corporate existence,  taxes,  interest,  brokerage fees and
commissions,  insurance  premiums,  compensation  and  expenses  of such  Fund's
trustees,   directors,  officers  or  employees,  legal,  accounting  and  audit
expenses,  management,  advisory,  sub-advisory,  administration and shareholder
servicing fees, charges of custodians,  transfer and dividend disbursing agents,
expenses (including  clerical expenses) incident to the issuance,  redemption or
repurchase of Fund shares,  fees and expenses  incident to the  registration  or
qualification  under federal or state securities laws of the Fund or its shares,
costs  (including  printing  and mailing  costs) of preparing  and  distributing
Prospectuses,  reports,  notices and proxy material to such Fund's shareholders,
all expenses  incidental to holding meetings of such Fund's trustees,  directors
and shareholders,  and extraordinary expenses as may arise, including litigation
affecting such Fund and legal  obligations  relating  thereto for which the Fund
may have to indemnify its trustees, directors and officers.


                                     - 10 -





         6. Compliance Services.

                  (a) If  Schedule  I  contains  a  requirement  for  the BNY to
provide  the Fund with  compliance  services,  such  services  shall be provided
pursuant to the terms of this Section 6 (the "Compliance Services"). The precise
compliance  review and  testing  services  to be  provided  shall be as mutually
agreed between BNY and each Fund, and the results of BNY's  Compliance  Services
shall be detailed  in a  compliance  summary  report  (the  "Compliance  Summary
Report")  prepared  on a periodic  basis as  mutually  agreed.  Each  Compliance
Summary  Report shall be subject to review and  approval by the Fund.  BNY shall
have no responsibility or obligation to provide  Compliance  Services other than
those services specifically listed in Schedule I.

                  (b) The Fund  will  examine  each  Compliance  Summary  Report
delivered  to it by BNY and  notify BNY of any error,  omission  or  discrepancy
within ten (10) days of its  receipt.  The Fund agrees to notify BNY promptly if
it fails to  receive  any  such  Compliance  Summary  Report.  The Fund  further
acknowledges  that  unless  it  notifies  the  BNY of  any  error,  omission  or
discrepancy within 10 days, such Compliance Summary Report shall be deemed to be
correct and conclusive in all respects.  In addition,  if the Fund learns of any
out-of-compliance   condition  before  receiving  a  Compliance  Summary  Report
reflecting such condition, the Fund will notify BNY of such condition within one
business day after discovery thereof.

                  (c)  While  BNY  will  endeavor  in  good  faith  to  identify
out-of-compliance  conditions,  BNY does not and could not for the fees charged,
make any guarantees,  representations  or warranties with respect to its ability
to identify all such conditions.  In the event of any errors or omissions in the
performance  of Compliance  Services,  the Fund's sole and exclusive  remedy and
BNY's sole liability shall be limited to re-performance by BNY of the Compliance
Services  affected and in connection  therewith  the  correction of any error or
omission,  if practicable and the preparation of a corrected  report, at no cost
to the Fund.

         7. Standard of Care; Indemnification.

                  (a) BNY shall act in good  faith in  carrying  out its  duties
hereunder.  Except as otherwise provided herein, BNY shall not be liable for any
costs,  expenses,  damages,  liabilities  or claims  (including  attorneys'  and
accountants'  fees) incurred by a Fund, except those costs,


                                     - 11 -



expenses,  damages,  liabilities  or  claims  arising  out of  BNY's  own  gross
negligence,  bad faith or wilful misconduct or reckless disregard for its duties
and  obligations  hereunder.  In no event shall BNY be liable to any Fund or any
third party for special,  indirect or consequential  damages, or lost profits or
loss of business,  arising under or in connection with this  Agreement,  even if
previously  informed of the  possibility  of such damages and  regardless of the
form of  action.  BNY  shall  not be liable  for any  loss,  damage or  expense,
including  counsel  fees and other costs and  expenses of a defense  against any
claim or liability,  resulting  from,  arising out of, or in connection with its
performance hereunder, including its actions or omissions, the incompleteness or
inaccuracy of any specifications or other information  furnished by the Fund, or
for delays  caused by  circumstances  beyond  BNY's  control,  unless such loss,
damage or  expense  arises  out of the gross  negligence,  bad faith or  willful
misconduct  of  BNY  or  reckless  disregard  for  its  duties  and  obligations
hereunder.

                  (b) Each Fund shall  indemnify  and hold harmless BNY from and
against any and all costs, expenses, damages,  liabilities and claims (including
claims  asserted by a Fund),  and reasonable  attorneys' and  accountants'  fees
relating  thereto,  which are  sustained  or  incurred  or which may be asserted
against  BNY,  by reason of or as a result of any action  taken or omitted to be
taken by BNY in good  faith  hereunder  or in  reliance  upon (i) any law,  act,
regulation  or  interpretation  of the same even though the same may  thereafter
have been altered,  changed,  amended or repealed, (ii) such Fund's Registration
Statement or Prospectus,  (iii) any  instructions of an officer of such Fund, or
(iv) any opinion of legal  counsel for such Fund;  provided  however that if BNY
after  making a good faith  effort to seek  guidance  from Fund counsel does not
receive the required  guidance in a reasonable period of time, then BNY may seek
and rely on the advice of counsel to BNY,  provided  that such  counsel has been
approved by the Fund,  where notice from BNY as to its selected counsel which is
not objected to in writing by the Fund within one business day shall  constitute
the Fund's approval,, or arising out of transactions or other activities of such
Fund which occurred prior to the commencement of this Agreement;  provided, that
no Fund shall indemnify BNY for costs, expenses, damages,  liabilities or claims
for  which  BNY is  liable  under  preceding  6(a).  This  indemnity  shall be a
continuing obligation of each Fund, its successors and assigns,  notwithstanding
the  termination  of this  Agreement.  Without  limiting the  generality  of the
foregoing,  each Fund shall indemnify BNY against and save BNY harmless

                                     - 12 -




from any loss,  damage or expense,  including  counsel  fees and other costs and
expenses of a defense  against any claim or  liability,  arising from any one or
more of the following:

                           (i) Errors in records or instructions,  explanations,
information,  specifications  or  documentation of any kind, as the case may be,
supplied to BNY as described above or by or on behalf of a Fund;


                                     - 13 -



                           (ii) Action or inaction  taken or omitted to be taken
by BNY pursuant to written or oral instructions of the Fund or otherwise without
gross or willful misconduct;

                           (iii) Any action  taken or omitted to be taken by BNY
in good faith in accordance  with the advice or opinion of counsel for a Fund or
its own counsel, provided that such counsel has been approved by the Fund, where
notice from BNY as to its selected  counsel  which is not objected to in writing
by the Fund  within one  business  day shall  constitute  the  Fund's  approval,
subject to the limitations set forth above;

                           (iv)  Any  improper  use  by a Fund  or  its  agents,
distributor or investment advisor of any valuations or computations  supplied by
BNY pursuant to this Agreement;

                           (v) The method of valuation of the Securities and the
method of computing each Series' net asset value; or

                           (vi) Any  valuations of Securities or net asset value
provided by a Fund.

                  (c)  Actions  taken or omitted in  reliance on oral or written
instructions,  or upon any information,  order,  indenture,  stock  certificate,
power of attorney, assignment,  affidavit or other instrument believed by BNY to
be genuine or  bearing  the  signature  of a person or  persons  believed  to be
authorized  to sign,  countersign  or execute  the same,  or upon the opinion of
legal  counsel for a Fund or its own  counsel,  subject to the  limitations  set
forth herein,  shall be  conclusively  presumed to have been taken or omitted in
good faith.

                  (d)  Notwithstanding  any other  provision  contained  in this
Agreement,  BNY shall have no duty or  obligation  with  respect to,  including,
without limitation, any duty or obligation to determine, or advise or notify the
Fund of: (a) the taxable nature of any distribution or amount received or deemed
received by, or payable to, a Fund;  (b) the taxable  nature or effect on a Fund
or its shareholders of any corporate actions,  class actions, tax reclaims,  tax
refunds,  or similar  events;  (c) the taxable  nature or taxable  amount of any
distribution  or  dividend  paid,  payable  or  deemed  paid,  by a Fund  to its
shareholders;  or (d) the effect under any federal, state, or foreign income tax
laws of the Fund making or not making any distribution or dividend  payment,  or
any election with respect thereto.


                                     - 14 -



         8. Compensation.

         For the services provided  hereunder,  each Fund agrees to pay BNY such
compensation  as is  mutually  agreed  from time to time and such  out-of-pocket
expenses (e.g.,  telecommunication charges, postage and delivery charges, record
retention costs,  reproduction  charges and transportation and lodging costs) as
are incurred by BNY in performing  its duties  hereunder.  Except as hereinafter
set forth,  compensation shall be calculated and accrued daily and paid monthly.
Each Fund  authorizes BNY to debit such Fund's  custody  account for all amounts
due and payable  hereunder,  subject to the  acknowledgement  as to  anticipated
payment by the Advisor (as defined  below) in this Section 8. BNY shall  deliver
to each Fund invoices for services  rendered  after debiting such Fund's custody
account with an indication that payment has been made. Upon  termination of this
Agreement before the end of any month, the compensation for such part of a month
shall be prorated  according  to the  proportion  which such period bears to the
full monthly  period and shall be payable upon the effective date of termination
of this Agreement.  For the purpose of determining  compensation payable to BNY,
each  Fund's net asset  value  shall be  computed at the times and in the manner
specified  in the Fund's  Prospectus.  BNY  understands  and agrees that XShares
Advisors LLC, the  investment  adviser to the Fund (the  "Advisor")  may pay the
fees and  expenses  under  this  Agreement  directly  to BNY as a result  of its
contractual  arrangements with the Fund and any such payment by the Advisor will
discharge  the  Fund of its  obligations  hereunder.  Notwithstanding  any  such
arrangements,  nothing  herein  shall  be  deemed  to  relieve  the  Fund of its
obligations  to pay such fees and  expenses  if such  payment is not made by the
Advisor.  In such  circumstances,  after notice to the Fund that the Advisor has
not paid such amounts,  each Fund  authorizes  BNY to debit such Fund's  custody
account for all amounts due and payable hereunder

         9. Term of Agreement.

                  (a) This Agreement  shall continue until  terminated by either
BNY giving to a Fund,  or a Fund  giving to BNY, a notice in writing  specifying
the date of such  termination,  which  date shall be not less than 90 days after
the date of the giving of such notice.  Upon  termination  hereof,  the affected
Fund(s) shall pay to BNY such  compensation as may be due as of the date of such
termination,  and shall reimburse BNY for any disbursements and expenses


                                     - 15 -



made or incurred by BNY and payable or reimbursable hereunder.

                  (b)  Notwithstanding  the  foregoing,  BNY may terminate  this
Agreement  upon 30 days  prior  written  notice  to a Fund  if such  Fund  shall
terminate  its custody  agreement  with The Bank of New York, or fail to perform
its  obligations  hereunder in a material  respect.  The Fund may terminate this
Agreement for "Cause" upon 30 days prior written  notice to BNY. For purposes of
this Section 9, "Cause"  shall mean (a) a material  breach of this  Agreement by
BNY, including a material breach of any representation or warranty, that has not
been cured within 30 days following  written notice of such breach;  (b) a final
unappealable  judicial,  regulatory or  administrative  ruling or order in which
BNY, its directors, officers employees or agents, has been found to be guilty of
criminal or unethical  behavior or conduct in  connection  with the provision of
services  similar  to the  services  covered  by  this  Agreement;  or  (c)  the
commencement  of any  voluntary or  involuntary  action under  chapter 11 of the
United States Code or any other law relating to the  liquidation  or dissolution
of BNY, the  reorganization  of its debtors or the  alteration  of rights of its
creditors.

         10. Authorized Persons.

         Attached  hereto as Exhibit B is a list of persons duly  authorized  by
the Board of each Fund to execute  this  Agreement  and give any written or oral
instructions,  or written or oral specifications,  by or on behalf of such Fund.
From  time to time each Fund may  deliver a new  Exhibit B to add or delete  any
person and BNY shall be entitled to rely on the last Exhibit B actually received
by BNY.

         11. Amendment.

         This Agreement may not be amended or modified in any manner except by a
written  agreement  executed  by BNY  and  the  Fund to be  bound  thereby,  and
authorized or approved by such Fund's Board.


                                     - 16 -



         12. Assignment.

         This  Agreement  shall  extend to and shall be binding upon the parties
hereto, and their respective  successors and assigns;  provided,  however,  that
this Agreement  shall not be assignable by any Fund without the written  consent
of BNY, or by BNY without the written  consent of the affected Fund  accompanied
by the authorization or approval of such Fund's Board.

         13. Governing Law; Consent to Jurisdiction.

         This  Agreement  shall be construed in accordance  with the laws of the
State of New York, without regard to conflict of laws principles  thereof.  Each
Fund 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
waives to the fullest  extent  permitted by law its right to a trial by jury. To
the extent that in any jurisdiction any Fund 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,  such Fund irrevocably agrees
not to claim, and it hereby waives, such immunity.

         14. Severability.

         In case any provision in or obligation  under this  Agreement  shall be
invalid,  illegal or unenforceable in any jurisdiction,  the validity,  legality
and  enforceability of the remaining  provisions or obligations shall not in any
way be affected or impaired thereby, and if any provision is inapplicable to any
person or circumstances,  it shall  nevertheless  remain applicable to all other
persons and circumstances.

         15. No Waiver.

         Each and  every  right  granted  to BNY  hereunder  or under  any other
document delivered hereunder or in connection herewith,  or allowed it by law or
equity,  shall be cumulative  and may be exercised from time to time. No failure
on the part of BNY to  exercise,  and no delay in  exercising,  any  right  will
operate as a waiver thereof,  nor will any single or partial  exercise by BNY of
any right preclude any other or future  exercise  thereof or the exercise of any
other right.



                                     - 17 -



         16. Notices.

         All notices,  requests,  consents and other communications  pursuant to
this Agreement in writing shall be sent as follows:

         if to a Fund, at

         TDAX Funds, Inc.
         c/o XShares Advisors LLC
         420 Lexington Ave., Suite 2550
         New York, NY 10170

         if to BNY, at

         The Bank of New York
         One Wall Street
         New York, New York 10286
         Attention:
         Title:


or at such  other  place  as may from  time to time be  designated  in  writing.
Notices hereunder shall be effective upon receipt.

         17. Counterparts.

         This Agreement may be executed in any number of  counterparts,  each of
which shall be deemed to be an original;  but such  counterparts  together shall
constitute only one instrument.

         18. Several Obligations.

         The parties acknowledge that the obligations of the Funds hereunder are
several  and not joint,  that no Fund  shall be liable  for any amount  owing by
another Fund and that the Funds have  executed one  instrument  for  convenience
only.


                                     - 18 -



         IN WITNESS  WHEREOF,  the  parties  hereto  have  caused the  foregoing
instrument to be executed by their duly  authorized  officers and their seals to
be hereunto affixed, all as of the day and year first above written.



                                  TDAX FUNDS, INC.




                                  By:   /s/ David W. Jaffin
                                        ----------------------------------------
                                  Title:    CFO and Secretary



                                  THE BANK OF NEW YORK




                                  By:   /s/ Edward G. McGann
                                        ----------------------------------------
                                  Title:    Managing Director




                                     - 19 -



                                    EXHIBIT A
                                    ---------



TDAX Independence 2010 Exchange-Traded Fund

TDAX Independence 2020 Exchange-Traded Fund

TDAX Independence 2030 Exchange-Traded Fund

TDAX Independence 2040 Exchange-Traded Fund

TDAX Independence In-Target Exchange-Traded Fund







                                    EXHIBIT B
                                    ---------



         I, David W. Jaffin,  Secretary and  Treasurer,  of TDAX Funds,  Inc., a
Maryland Corporation (the "Fund"), do hereby certify that:

         The following  individuals  serve in the following  positions  with the
Fund,  and each has been duly  elected or appointed by the Board of Directors of
the Fund to each such  position and qualified  therefor in  conformity  with the
Fund's Articles of Incorporation and By-Laws.  Each such person is authorized to
give written or oral  instructions  or written or oral  specifications  by or on
behalf of the Fund to the Bank.


David M. Kelley                       President
----------------------------          -------------------------------
Name                                  Title

Anthony F. Dudzinski                  Chief Operating Officer
----------------------------          -------------------------------
Name                                  Title

David W. Jaffin                       Secretary and Treasurer
----------------------------          -------------------------------
Name                                  Title





                                   SCHEDULE I
                                   ----------

                             ADMINISTRATIVE SERVICES
                             -----------------------


1.       Prepare minutes of Board of Director  meetings and assist the Secretary
         of each Fund in preparation for Board meetings.  Such minutes,  meeting
         agendas  and other  material  prepared  in  preparation  for each Board
         meeting are subject to the review and approval of Fund counsel.

2.       Perform for each Fund,  the  compliance  tests as  mutually  agreed and
         which shall be specific to each Series.  The Compliance Summary Reports
         listing the results of such tests are subject to review and approval by
         each Fund.

3.       Participate  in the  periodic  updating  of  each  Fund's  Registration
         Statement  and  Prospectus  and,  subject to  approval  by such  Fund's
         Treasurer  and  legal  counsel,  coordinate  the  preparation,  filing,
         printing and dissemination of periodic reports and other information to
         the SEC and the Fund's  shareholders,  including annual and semi-annual
         reports to shareholders,  Form N-SAR,  Form N-CSR, Form N-Q and notices
         pursuant to Rule 24f-2, Form N-PX.

4.       Prepare  workpapers  supporting the  preparation of federal,  state and
         local  income tax returns for each Fund for review and approval by each
         Fund's independent  auditors;  perform ongoing wash sales review (i.e.,
         purchases and sales of Fund investments  within 30 days of each other);
         and  prepare  Form  1099s  with  respect to each  Fund's  directors  or
         trustees and file such forms upon the approval of the Fund's Treasurer.

5.       Prepare and, subject to approval of each Fund's Treasurer,  disseminate
         to such Fund's  Board  quarterly  unaudited  financial  statements  and
         schedules  of such Fund's  investments  and make  presentations  to the
         Board, as appropriate.

6.       Subject to approval of each Fund's Board, assist such Fund in obtaining
         and filing fidelity bond and E&O/D&O insurance coverage.

7.       Prepare  statistical  reports for outside  information  services (e.g.,
         IBC/Donoghue, ICI, Lipper Analytical and Morningstar).

8.       Attend shareholder and Board meetings as requested from time to time.

9.       Subject  to  review  and  approval  by the  Fund  Treasurer,  establish
         appropriate expense accruals, maintain expense files and coordinate the
         payment of invoices for each Fund.

10.      Calculate ordinary income and capital gain distributions for review and
         approval by the Funds'  officers and independent  auditor.



11.      Monthly calculation of performance on NAV




                                     - 2 -



                                   SCHEDULE II
                                   -----------
                 ACCOUNTING, VALUATION AND COMPUTATION SERVICES
                 ----------------------------------------------


I.       BNY shall  maintain  the  following  records on a daily  basis for each
         Series.

         1. Report of current values of all portfolio securities

         2. Statement of net asset value per share

II.      BNY shall  maintain the  following  records on a monthly basis for each
         Series:

         1. General Ledger

         2. General Journal

         3. Cash Receipts Journal

         4. Cash Disbursements Journal

         5. Subscriptions Journal

         6. Redemptions Journal

         7. Accounts Receivable Reports

         8. Accounts Payable Reports

         9. Open Subscriptions/Redemption Reports

         10. Transaction (Securities) Journal

         11. Broker Net Trades Reports

III.     BNY  shall  prepare  a  Holdings  Ledger on a  quarterly  basis,  and a
Buy-Sell  Ledger  (Broker's  Ledger)  on a  semiannual  basis  for each  Series.
Schedule D shall be produced on an annual basis for each Series.





         The above  reports  may be  printed  according  to any  other  required
frequency  to  meet  the  requirements  of the  Internal  Revenue  Service,  The
Securities and Exchange Commission and the Fund's Auditors.

         IV.  For  internal  control  purposes,  BNY uses the  Account  Journals
produced by The Bank of New York Custody  System to record daily  settlements of
the following for each Series:

         1. Securities bought

         2. Securities sold

         3. Interest received

         4. Dividends received

         5. Capital stock sold

         6. Capital stock redeemed

         7. Other income and expenses

         All portfolio  purchases for the Fund are recorded to reflect  expected
maturity value and total cost including any prepaid interest.




                                     - 2 -





                                                                  Exhibit (h)(2)


                      TRANSFER AGENCY AND SERVICE AGREEMENT


         AGREEMENT  made as of the 24th day of July,  2007,  by and between TDAX
Funds,  Inc. a Maryland  corporation,  having its principal  office and place of
business at 420 Lexington  Ave.,  Suite 2550, New York, NY 10170 (the "Company")
and THE BANK OF NEW YORK, a New York banking company having its principal office
and place of business at One Wall Street, New York, New York 10286 (the "Bank").

         WHEREAS, the Company is registered as an open-end management investment
company under the  Investment  Company Act of 1940, as amended (the "1940 Act");
and

         WHEREAS, the Company, on behalf of the investment  portfolios listed on
Appendix A hereto (as such  Appendix A may be amended from time to time) (each a
"Fund"  and  collectively,  the  "Funds")  desires  to  appoint  the Bank as its
transfer agent,  dividend  disbursing agent and agent in connection with certain
other activities, and the Bank desires to accept such appointment;

         WHEREAS,  the Company and designated agents will issue for purchase and
redeem  shares of Funds of the Company only in  aggregations  of shares known as
"Creation Units" (currently 50,000 shares) (each a "Creation Unit")  principally
in kind;

         WHEREAS,  The Depository Trust Company, a limited purpose trust company
organized under the laws of the State of New York ("DTC"),  or its nominee (Cede
& Co.), will be the initial record or registered  owner (the  "Shareholder")  of
all shares;



         NOW,  THEREFORE,  in  consideration  of  the  mutual  covenants  herein
contained, the parties hereto agree as follows:

1. Terms of Appointment; Duties of the Bank

         1.1 Subject to the terms and  conditions  set forth in this  Agreement,
the Company, on behalf of the Funds, hereby employs and appoints the Bank to act
as, and the Bank  agrees to act as its  transfer  agent for the  authorized  and
issued  shares of  common  stock,  $.001  par  value  per  share of the  Company
("Shares"), and as the Company's dividend disbursing agent.

         1.2 The Bank agrees that it will perform the following services:

                  (a) In accordance with the terms and conditions of the form of
Participant Agreement, attached hereto as Exhibit A, the Bank shall:

                           (i)  Perform  and  facilitate   the   performance  of
purchases and redemption of Creation Units;



                           (ii)   Prepare   and   transmit  by  means  of  DTC's
book-entry  system  payments for  dividends  and  distributions  declared by the
Company on behalf of the applicable Fund;

                           (iii)  Maintain the record of the name and address of
the  Shareholder  and the number of Shares issued by the Company and held by the
Shareholder;

                           (iv) Record the issuance of Shares of the Company and
maintain  a record of the  total  number  of  Shares  of the  Company  which are
authorized,  based upon data provided to it by the Company.  The Bank shall have
no obligation, when recording the issuance of Shares, to monitor the issuance of
such Shares or to take  cognizance  of any laws relating to the issue or sale of
such Shares, which functions shall be the sole responsibility of the Company.

                           (v)  Prepare  and  transmit  to the  Company  and the
Administrator  and to any  applicable  securities  exchange (as specified to the
Bank  by the  Administrator  or by the  Company)  information  with  respect  to
purchases and redemptions of Shares;

                           (vi) On days that the Company  may accept  orders for
purchases or  redemptions,  calculate and transmit to the Bank and the Company's
administrator the number of outstanding Shares for each Fund;

                           (vii) On days that the Company may accept  orders for
purchases or redemptions  (pursuant to the Participant  Agreement),  transmit to
the Bank, the Company and DTC the amount of Shares purchased on such day;

                           (viii)  Confirm to DTC the number of Shares issued to
the Shareholder, as DTC may reasonably request;

                           (ix) Prepare and deliver other  reports,  information
and documents to DTC as DTC may reasonably request;

                           (x)  Extend  the  voting  rights  to the  Shareholder
and/or  beneficial  owners  of  Shares  in  accordance  with  the  policies  and
procedures of DTC for book-entry only securities;

                           (xi) Maintain  those books and records of the Company
specified by the Company in Schedule A attached hereto; and

                           (xii)  Prepare a monthly  report of all purchases and
redemptions  during such month on a gross transaction  basis. The monthly report
shall show the  counterpart  and amount of each  purchase  on a daily  basis net
number of shares either redeemed or created for such Business Day.

                  (b) In addition to and neither in lieu nor in contravention of
the services set forth in the above  paragraph (a), the Bank shall:  perform the
customary  services of a transfer agent and dividend  disbursing agent including
but not limited to: maintaining the account of the Shareholder, obtaining a list
of DTC participants  holding interests in the Global  Certificate at the request
of the Company, mailing proxy materials, shareholder reports and prospectuses to
the


                                     - 2 -



Shareholder or DTC participants or beneficial owners of Shares at the request of
the Company and those services set forth on Schedule A attached hereto.

                  (c) The  following  shall be  delivered to DTC for delivery to
beneficial  owners  in  accordance  with  the  procedures  for  book-entry  only
securities of DTC:

                           (i) Annual and semi-annual reports of the Company;

                           (ii)  Proxies,   proxy  statements  and  other  proxy
soliciting materials;

                           (iii)  Prospectus and  amendments and  supplements to
the Prospectus, including stickers; and

                           (iv) Other  communications  as may be required by law
or reasonably requested by the Company.

                  (d) If the Shares are represented by individual  Certificates,
the Bank shall  perform  the  services  agreed to in writing by the Bank and the
Company.

                  (e) The Bank shall  provide  additional  services  (if any) on
behalf of the Company (i.e.,  escheatment  services) which may be agreed upon in
writing between the Company and the Bank.

2. Fees and Expenses

         2.1 The Bank shall receive from the Company such  compensation  for the
Transfer Agent's services  provided  pursuant to this Agreement as may be agreed
to from time to time in a written fee schedule approved by the parties. The fees
are accrued  daily and billed  monthly and shall be due and payable upon receipt
of the invoice.  Upon the  termination of this  Agreement  before the end of any
month,  the fee for the  part of the  month  before  such  termination  shall be
prorated  according to the proportion  which such part bears to the full monthly
period and shall be payable upon the date of termination of this Agreement.

         2.2 In  addition to the fee paid under  Section 2.1 above,  the Company
agrees to  reimburse  the Bank for  out-of-pocket  expenses,  including  but not
limited  to  confirmation  production,  postage,  forms,  telephone,  microfilm,
microfiche,  tabulating  proxies,  records storage,  or advances incurred by the
Bank for the items set out in the fee  schedule  attached  hereto or relating to
dividend  distributions  and reports  (whereas all expenses related to creations
and  redemptions of Fund  securities  shall be borne by the relevant  authorized
participant in such creations and redemptions).  In addition, any other expenses
incurred by the Bank at the request or with the consent of the Company,  will be
reimbursed by the Company on behalf of the applicable Fund.

         2.3 The Company agrees to pay all fees and reimbursable expenses within
ten  business  days  following  the  receipt of the  respective  billing  notice
accompanied by supporting documentation, as appropriate.  Postage for mailing of
dividends,  proxies,  Company  reports  and other  mailings  to all  shareholder
accounts  shall be  advanced  to the Bank by the Company at least seven (7) days
prior to the mailing date of such  materials.  The Bank  understands  and agrees
that


                                     - 3 -



XShares Advisors LLC, the investment  adviser to the Company (the "Advisor") may
pay the fees and expenses  under this Section 2 directly to the Bank as a result
of its  contractual  arrangements  with the Company and any such  payment by the
Advisor will discharge the Company of its obligations hereunder. Notwithstanding
any such arrangements,  nothing herein shall be deemed to relieve the Company of
its obligations to pay such fees and expenses if such payment is not made by the
Advisor.

3. Representations and Warranties of the Bank

         3.1 The Bank represents and warrants to the Company that:

                  It is a banking  company  duly  organized  and existing and in
good standing under the laws of the State of New York.

                  It is duly  qualified to carry on its business in the State of
New York.

                  It is empowered  under  applicable laws and by its Charter and
By-Laws to act as transfer agent and dividend disbursing agent and to enter into
and perform this Agreement.

                  All  requisite  corporate   proceedings  have  been  taken  to
authorize it to enter into and perform this Agreement.

                  It has and  will  continue  to have  access  to the  necessary
facilities,  equipment and personnel to perform its duties and obligations under
this Agreement.

                  It is the  policy  of the Bank to be in  compliance  with U.S.
anti-money   laundering   ("AML")  and  economic  sanctions  ("OFAC")  laws  and
regulations.  To that  end,  the  Bank has  implemented  internal  policies  and
procedures for complying with the requirements of AML and OFAC regulations.


4. Representations and Warranties of the Company

         4.1 The Company represents and warrants to the Bank that:

                  It is a  corporation  duly  organized and existing and in good
standing under the laws of Maryland.

                  It is empowered  under  applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement.

                  All  corporate  proceedings  required  by  said  Articles  and
By-Laws  have  been  taken to  authorize  it to  enter  into  and  perform  this
Agreement.

                  It is an open-end  management  investment  company  registered
under the Investment Company Act of 1940, as amended.



                                     - 4 -



                  A registration  statement under the Securities Act of 1933, as
amended,  on behalf of each of the Funds is currently  effective and will remain
effective,  and appropriate state securities law filings have been made and will
continue to be made, with respect to all Shares of the Company being offered for
sale.

5. [Section Reserved]

6. Indemnification

         6.1 The Bank  shall  not be  responsible  for,  and the  Company  shall
indemnify  and hold the Bank  harmless  from and  against,  any and all  losses,
damages,  costs,  charges,  counsel  fees,  payments,   expenses  and  liability
("Losses") arising out of or attributable to:

                  (a) All  actions of the Bank or its  agents or  subcontractors
required to be taken pursuant to this Agreement,  provided that such actions are
taken without negligence, or willful misconduct.

                  (b) The Company's negligence or willful misconduct.

                  (c)  The  breach  of any  representation  or  warranty  of the
Company hereunder.

                  (d)  The  conclusive  reliance  on or use by the  Bank  or its
agents or  subcontractors of information,  records,  documents or services which
(i) are received by the Bank or its agents or subcontractors, and (ii) have been
prepared,  maintained or performed by the Company or any other person or firm on
behalf of the Company  including but not limited to any previous  transfer agent
or registrar.

                  (e) The  conclusive  reliance  on, or the  carrying out by the
Bank or its agents or  subcontractors  of any  instructions  or  requests of the
Company on behalf of the Company.

                  (f)  The  offer  or  sale  of  Shares  in   violation  of  any
requirement  under the federal  securities laws or regulations or the securities
laws or regulations of any state that such Shares be registered in such state or
in violation of any stop order or other  determination  or ruling by any federal
agency or any state  with  respect  to the offer or sale of such  Shares in such
state.

         6.2 At any time the Bank may apply to any  officer of the  Company  for
instructions,  and may consult with the Company's  legal counsel with respect to
any matter  arising in connection  with the services to be performed by the Bank
under this Agreement, and the Bank and its agents or subcontractors shall not be
liable and shall be  indemnified  by the Company for any action taken or omitted
by it in reliance upon such  instructions  or upon the advice or opinion of such
Company  counsel  (except for the Bank's willful  misconduct) and shall promptly
advise  the  Company  of such  advice or  opinion.  The  Bank,  its  agents  and
subcontractors  shall be protected and  indemnified  in acting upon any paper or
document,  reasonably  believed  to be  genuine  and to have been  signed by the
proper person or persons, or upon any instruction, information, data, records or
documents  provided the Bank or its agents or subcontractors by machine readable
input,  telex,  CRT data entry or other similar means authorized by the Company,
and shall not be held to have notice of any change of  authority  of any person,
until receipt of written notice thereof from the Company.


                                     - 5 -



         6.3 The Company shall not be responsible for, and the Bank shall liable
for direct money damages arising out of or attributable to:

                  (a) The Bank's own negligence or willful misconduct.

                  (b) The breach of any  representation  or warranty of the Bank
         hereunder.

7. Standard of Care

         The Bank shall have no  responsibility  and shall not be liable for any
loss or damage  unless  such loss or damage is caused by its own  negligence  or
willful  misconduct  or  that  of its  employees,  or its  breach  of any of its
representations.  In no event shall the Bank be liable for special,  indirect or
consequential damages regardless of the form of action and even if the same were
foreseeable.

8. Concerning the Bank

         8.1 Bank may enter into  subcontracts,  agreements  and  understandings
with any BNY  affiliate,  whenever and on such terms and  conditions as it deems
necessary or appropriate to perform its services hereunder. No such subcontract,
agreement or understanding shall discharge Bank from its obligations hereunder.

         8.2 Bank shall be  entitled  to  conclusively  rely upon any written or
oral  instruction  actually  received by Bank and  reasonably  and in good faith
believed by Bank to be duly authorized and delivered.  Company agrees to forward
to Bank  written  instructions  confirming  oral  instructions  by the  close of
business of the same day that such oral instructions are given to Bank.  Company
agrees that the fact that such confirming written  instructions are not received
or that  contrary  written  instructions  are  received  by Bank shall in no way
affect the validity or  enforceability  of transactions  authorized by such oral
instructions  and  effected  by Bank.  If  Company  elects to  transmit  written
instructions through an on-line  communication system offered by Bank, Company's
use  thereof  shall be subject to the terms and  conditions  attached  hereto as
Appendix A.

         8.3 Bank shall  establish  and  maintain a disaster  recovery  plan and
back-up system at all times  satisfying the  requirements of all applicable law,
rules,  and regulations  and which is reasonable  under the  circumstances  (the
"Disaster  Recovery Plan and Back-Up System").  Bank shall not be responsible or
liable for any failure or delay in the performance of its obligations under this
Agreement  arising out of or caused,  directly or indirectly,  by  circumstances
beyond its control which are not a result of its negligence,  including  without
limitation,  acts of God;  earthquakes;  fires;  floods; wars; civil or military
disturbances; sabotage; epidemics; riots; interruptions, loss or malfunctions of
utilities,  transportation,  computer  (hardware or software) or  communications
service;  accidents;  labor  disputes;  acts of  civil  or  military  authority;
governmental  actions;  or inability  to obtain  labor,  material,  equipment or
transportation,  provided that the Bank has  established  and is maintaining the
Disaster Recovery Plan and Back-Up System, or if not, that such delay or failure
would  have  occurred  even if Bank  had  established  and was  maintaining  the
Disaster Recovery Plan and Back-Up System. Upon the occurrence of any such delay
or  failure  Bank  shall use  commercially  reasonable  best  efforts  to resume
performance as soon as practicable under the circumstances.



                                     - 6 -



         8.4 Bank shall  have no duties or  responsibilities  whatsoever  except
such  duties  and  responsibilities  as  are  specifically  set  forth  in  this
Agreement,  and no  covenant  or  obligation  shall be implied  against  Bank in
connection with this Agreement.

         8.5 At any time the Bank may apply to an officer of the Company written
instructions  with respect to any matter  arising in connection  with the Bank's
duties and obligations  under this  Agreement,  and the Bank shall not be liable
for any  action  taken or  omitted  to be  taken  by the  Bank in good  faith in
accordance with such instructions. Such application by the Bank for instructions
from an  officer of the  Company  may,  at the option of the Bank,  set forth in
writing any action  proposed to be taken or omitted to be taken by the Bank with
respect to its duties or obligations under this Agreement and the date on and/or
after which such action shall be taken, and the Bank shall not be liable for any
action taken or omitted to be taken in  accordance  with a proposal  included in
any such  application on or after the date specified  therein  unless,  prior to
taking  or  omitting  to take any such  action,  the Bank has  received  written
instructions in response to such  application  specifying the action to be taken
or  omitted  and  provided   that  the  Company  shall  have  had  a  reasonable
opportunity, under the circumstance, to respond. The Bank may consult counsel to
the Company at the expense of the  Company,  and shall be fully  protected  with
respect to anything done or omitted by it in good faith in  accordance  with the
advice or opinion of such counsel.

         8.6  Notwithstanding  any provisions of this Agreement to the contrary,
the Bank shall be under no duty or obligation to inquire into,  and shall not be
liable for:

                  (a) The legality of the issue, sale or transfer of any Shares,
the  sufficiency  of the amount to be received in connection  therewith,  or the
authority of the Company to request such issuance, sale or transfer;

                  (b)  The  legality  of  the   purchase  of  any  Shares,   the
sufficiency of the amount to be paid in connection  therewith,  or the authority
of the Company to request such purchase;

                  (c) The  legality of the  declaration  of any  dividend by the
Company,  or the  legality  of the issue of any  Shares in  payment of any stock
dividend; or

                  (d) The legality of any  recapitalization  or  readjustment of
the Shares.

9. Covenants of the Company and the Bank

         9.1 The Company shall promptly furnish to the Bank the following:

                  (a) A  certified  copy  of  the  resolution  of the  Board  of
Directors  of the  Company  authorizing  the  appointment  of the  Bank  and the
execution and delivery of this Agreement.

                  (b) A copy of the Articles of Incorporation and By-Laws of the
Company and all amendments thereto.

                  (c) Shares will be transferred  upon  presentation to the Bank
of Shares to its electronic account at DTC, accompanied by such documents as the
Bank deems  necessary  to  evidence  the  authority  of the person  making  such
transfer,  and bearing satisfactory  evidence of


                                     - 7 -



the payment of applicable  stock  transfer  taxes,  if any. In the case of small
estates where no  administration  is contemplated,  the Bank may, when furnished
with an appropriate  surety bond, and without  further  approval of the Company,
transfer Shares  registered in the name of the decedent where the current market
value of the Shares  being  transferred  does not exceed such amount as may from
time to time be prescribed by the various states. The Bank reserves the right to
refuse  to  transfer  Shares  until it is  satisfied  that the  endorsements  on
documents  submitted  to it are valid and  genuine,  and for that purpose it may
require, unless otherwise instructed by an Officer of the Company, a guaranty of
signature by an "eligible guarantor institution" meeting the requirements of the
Bank, which  requirements  include  membership or participation in STAMP or such
other "signature guarantee program" as may be determined by the Bank in addition
to,  or in  substitution  for,  STAMP,  all in  accordance  with the  Securities
Exchange Act of 1934, as amended.  The Bank also reserves the right to refuse to
transfer  Shares until it is satisfied  that the  requested  transfer is legally
authorized,  and it shall  incur no  liability  for the refusal in good faith to
make transfers which the Bank, in its judgment,  deems improper or unauthorized,
or until it is  satisfied  that there is no basis to any claims  adverse to such
transfer.  The Bank may,  in  effecting  transfers  of  Shares,  rely upon those
provisions  of the  Uniform Act for the  Simplification  of  Fiduciary  Security
Transfers or the Uniform  Commercial  Code, as the same may be amended from time
to time,  applicable  to the  transfer  of  securities,  and the  Company  shall
indemnify  the Bank for any act done or omitted by it in good faith in  reliance
upon such laws.

                  (d) The Bank  assumes no  responsibility  with  respect to the
transfer of restricted  securities  where  counsel for the Company  advises that
such transfer may be properly effected.

         9.2  The  Company  shall  deliver  to the  Bank,  at its  request,  the
following documents on or before the effective date of any increase, decrease or
other change in the total number of Shares authorized to be issued:

                  (a)  An  opinion  of  counsel  for  the  Company,  in  a  form
satisfactory  to the Bank,  with respect to (i) the validity of the Shares,  the
obtaining of all necessary governmental consents,  whether such Shares are fully
paid and  non-assessable  and the status of such Shares under the Securities Act
of 1933, as amended,  the Securities  Exchange Act of 1934, as amended,  and any
other applicable  federal law or regulations  (i.e., if subject to registration,
that they have been  registered and that the  Registration  Statement has become
effective or, if exempt, the specific grounds therefore), (ii) the status of the
Company with regard to the Investment Company Act of 1940, as amended, and (iii)
the due and proper listing of the Shares on all applicable securities exchanges;
and

                  (b) In the case of an increase, if the appointment of the Bank
was theretofore expressly limited, a certified copy of a resolution of the Board
of Directors of the Company increasing the authority of the Bank.

         9.3 Prior to the issuance of any  additional  Shares  pursuant to stock
dividends,  stock splits or otherwise,  and prior to any reduction in the number
of Shares outstanding,  the Company shall deliver, if requested by the Bank, the
following documents to the Bank:



                                     - 8 -



                  (a) A certified copy of the  resolutions  adopted by the Board
of Directors and/or the shareholders of the Company authorizing such issuance of
additional Shares of the Company or such reduction, as the case may be;

                  (b)  A  certified  copy  of  the  order  or  consent  of  each
governmental  or regulatory  authority  required by law as a prerequisite to the
issuance  or  reduction  of such  Shares,  as the case may be, and an opinion of
counsel for the Company that no other order or consent is required; and

                  (c)  An  opinion  of  counsel  for  the  Company,  in  a  form
satisfactory  to the Bank,  with respect to (i) the validity of the Shares,  the
obtaining of all necessary governmental consents,  whether such Shares are fully
paid and  non-assessable  and the status of such Shares under the Securities Act
of 1933, as amended,  the Securities  Exchange Act of 1934, as amended,  and any
other applicable  federal law or regulations  (i.e., if subject to registration,
that they have been  registered and that the  Registration  Statement has become
effective or, if exempt, the specific grounds therefore), (ii) the status of the
Company with regard to the Investment Company Act of 1940, as amended, and (iii)
the due and proper listing of the Shares on all applicable securities exchanges;
and

         9.4 The Bank agrees that all records prepared or maintained by the Bank
relating to the services to be performed by the Bank  hereunder are the property
of the  Company  and  will be  preserved,  maintained  and made  available  upon
reasonable  request,  and will be surrendered  promptly to the Company on and in
accordance with its request.

         9.5 The Bank and the Company agree that all books, records, information
and data  pertaining  to the business of the other party which are  exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential, and shall not be voluntarily disclosed to any other person,
except as may be, or may become required by law, by  administrative  or judicial
order or by rule.

         9.6 In case of any  requests  or  demands  for  the  inspection  of the
Shareholder records of the Company, the Bank will endeavor to notify the Company
and to secure  instructions from an authorized officer of the Company as to such
inspection.  The Bank reserves the right,  however,  to exhibit the  Shareholder
records  to any  person  whenever  it is  advised  by its  counsel  that  it may
reasonably  be  expected  to be held  liable  for the  failure  to  exhibit  the
Shareholder records to such person.

         9.7 Bank shall file such appropriate information returns concerning the
payment and  composition  of dividends  and capital gain  distributions  and tax
withholding with the proper Federal, State and local authorities as are required
by law to be filed by the Company and shall  withhold  such sums as are required
to be withheld by applicable law.

10. Termination of Agreement

         10.1 The term of this Agreement  shall be one year  commencing upon the
date hereof (the "Initial  Term") and shall  automatically  renew for additional
annual  terms  except  that  the  term  of  this  Agreement  may at any  time be
terminated by either BNY giving to the Fund, or the Fund giving to BNY, a notice
in writing specifying the date of such termination, which date shall


                                     - 9 -



be not less than 90 days  after the date of the giving of such  notice,  and the
term of this Agreement shall immediately terminate upon dissolution of the Fund.
Upon  termination,  other  than  a  termination  by  the  Fund  pursuant  to the
succeeding  Section  10.2,  the  Fund  shall  pay to BNY,  if  terminated,  such
compensation  as may be due as of the date of such  termination,  and,  the Fund
shall  reimburse  BNY for any  disbursements  and  reasonable  expenses  made or
incurred  by BNY and  payable  or  reimbursable  hereunder,  including  fees and
compensation  for work done or services  provided  by BNY after the  termination
date.

         10.2 Either  party hereto may  terminate  this  Agreement  prior to the
expiration  of the  Initial  Term in the  event  the other  party  breaches  any
material provision of this Agreement,  including, without limitation in the case
of  the  Company,   its  obligations   under  Section  2.1,  provided  that  the
non-breaching  party gives written notice of such breach to the breaching  party
and the breaching  party does not cure such violation  within 60 days of receipt
of such notice.


         10.3 The terms of Article 2 and Article 6 shall survive the termination
of this Agreement.

11. Additional Series

         11.1 In the event that the Company  establishes  one or more additional
series  of Shares  with  respect  to which it  desires  to have the Bank  render
services as transfer  agent under the terms hereof,  it shall so notify the Bank
in writing,  and if the Bank agrees in writing to provide  such  services,  such
additional issuance shall become Shares hereunder.

12. Assignment

         12.1 Neither this Agreement nor any rights or obligations hereunder may
be assigned by either party without the written consent of the other party.

         12.2 This  Agreement  shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and assigns.

13. Severability and Beneficiaries

         13.1 In case any provision in or obligation  under this Agreement shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining  provisions shall not in any way be affected
thereby.  This  Agreement  shall extend to and shall be binding upon the parties
hereto, and their respective  successors and assigns;  provided,  however,  that
this  Agreement  shall not be  assignable  by either  party  without the written
consent of the other.

14. Amendment

         14.1 This  Agreement may be amended or modified by a written  agreement
executed by both parties and authorized or approved by a resolution of the Board
of Directors of the Company.



                                     - 10 -



15. New York Law to Apply

         15.1  This  Agreement   shall  be  construed  in  accordance  with  the
substantive  laws of the State of New York,  without regard to conflicts of laws
principles  thereof.  Company and Bank hereby consent to the  jurisdiction  of a
state or federal court  situated in New York City,  New York in connection  with
any dispute arising hereunder. Company hereby irrevocably waives, to the fullest
extent  permitted by applicable law, any objection which it may now or hereafter
have to the laying of venue of any such  proceeding  brought in such a court and
any claim that such  proceeding  brought in such a court has been  brought in an
inconvenient forum.  Company and Bank each hereby irrevocably waives any and all
rights to trial by jury in any legal  proceeding  arising  out of or relating to
this Agreement.

16. Merger of Agreement

         16.1 This  Agreement  constitutes  the  entire  agreement  between  the
parties hereto and  supersedes  any prior  agreement with respect to the subject
matter hereof whether oral or written.

17. Limitations of Liability of the Directors and Shareholders

         17.1 It is expressly  acknowledged  and agreed that the  obligations of
the  Company  hereunder  shall  not be  binding  upon  any of the  shareholders,
Directors,  officers,  employees or agents of the Company, personally, but shall
bind only the Company  property of the  Company,  as provided in its Articles of
Incorporation  Company.  The execution and delivery of this  Agreement have been
authorized  by the  Directors  of the  Company  and  signed by an officer of the
Company,  acting as such, and neither such  authorization  by such Directors 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  Company  property  of the  Company as  provided  in its
Articles of Incorporation.

18. Counterparts

         18.1 This Agreement may be executed by the parties hereto on any number
of counterparts,  and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.



                                     - 11 -



         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.

                                  TDAX FUNDS, INC.




                                  By:   /s/ David W. Jaffin
                                        ----------------------------------------
                                  Title:    CFO and Secretary



                                  THE BANK OF NEW YORK




                                  By:   /s/ Edward G. McGann
                                        ----------------------------------------
                                  Title:    Managing Director



                                     - 12 -




                                   SCHEDULE A
                                   ----------

                   BOOKS AND RECORDS TO BE MAINTAINED BY BANK
                   ------------------------------------------


Source Documents requesting Creations and Redemptions

Correspondence/AP Inquiries

Reconciliations, bank statements, copies of canceled checks, cash proofs

Daily/Monthly reconciliation of outstanding units between the Company and DTC

Net Asset Computation Documentation

Dividend Records

Year-end Statements and Tax Forms



                                     - 13 -




Exhibit A
---------

Form of Authorized Participant Agreement



                                     - 14 -





                                   APPENDIX A

Fund Names:
-----------

TDAX Independence 2010 Exchange-Traded Fund

TDAX Independence 2020 Exchange-Traded Fund

TDAX Independence 2030 Exchange-Traded Fund

TDAX Independence 2040 Exchange-Traded Fund

TDAX Independence In-Target Exchange-Traded Fund



                                     - 15 -





                                                                  Exhibit (h)(3)


                    FORM OF SECURITIES LENDING AGREEMENT AND GUARANTY



         AGREEMENT,  dated as of July 24,  2007,  between  TDAX  Funds,  Inc. on
behalf of each of its  Series  listed on Exhibit A (each  Series is  hereinafter
referred to as "Lender"), and The Bank of New York ("Bank").

                                   ARTICLE I
                                   DEFINITIONS
                                   -----------

         Whenever used in this Agreement, unless the context otherwise requires,
the following words shall have the meanings set forth below:

         1. "Act of  Insolvency"  shall mean (i) the  filing by a Borrower  of a
petition in  bankruptcy or a petition  seeking  reorganization,  liquidation  or
similar relief,  or the filing of any such petition  against a Borrower which is
not  dismissed or stayed within 60 calendar  days,  (ii) the  adjudication  of a
Borrower as  bankrupt  or  insolvent,  (iii) the  seeking or  consenting  to the
appointment  of a trustee,  receiver or  liquidator  by a Borrower,  or (iv) the
making of a general  assignment  for the benefit of creditors by a Borrower or a
Borrower's admission in writing of its inability to pay its debts as they become
due.

         2.  "Account"  shall  mean  the  custodial   account   established  and
maintained by Bank on behalf of Lender for the  safekeeping  of  Securities  and
monies received by Bank from time to time.

         3. "Approved  Investment" shall mean any type of security,  instrument,
participation  or interest in property in which Cash  Collateral may be invested
or reinvested, as set forth on Schedule I hereto (which may be amended from time
to time by execution of a revised Schedule I).

         4.  "Authorized  Person" shall mean any officer of Lender and any other
person, whether or not any such person is an officer or employee of Lender, duly
authorized by corporate  resolutions of the Board of Directors of Lender to give
Oral  and/or  Written  Instructions  on behalf of  Lender,  such  persons  to be
designated in a Certificate which contains a specimen signature of such person.

         5. "BNY  Affiliate"  shall mean any  affiliate of Bank, as such term is
defined in Regulation W issued by the Board of Governors of the Federal  Reserve
System.

         6. "Book-Entry System" shall mean the  Treasury/Reserve  Automated Debt
Entry System maintained at The Federal Reserve Bank of New York.





         7. "Borrower"  shall mean any entity named on a list supplied to Lender
by Bank (as such list may be amended  from time to time),  other than any entity
deleted from such list pursuant to a Certificate.

         8. "Business Day" shall mean any day on which Bank is open for business
and on which the Book-Entry  System and/or the applicable  Depositories are open
for business.

         9. "Cash  Collateral"  shall mean either fed funds or New York Clearing
House funds, as applicable for a particular Loan.

         10. "Certificate" shall mean any notice, instruction, schedule or other
instrument in writing,  authorized or required by this  Agreement to be given to
Bank,  which is  actually  received by Bank and signed on behalf of Lender by an
Authorized  Person or a person  reasonably  believed by Bank to be an Authorized
Person.

         11.  "Collateral" shall mean Government  Securities,  Letters of Credit
and/or Cash Collateral.

         12.  "Collateral   Account"  shall  mean  an  account  established  and
maintained by Bank for the purpose of holding Collateral,  Approved Investments,
Proceeds and any Securities  Loan Fee paid by Borrowers in connection with Loans
hereunder.

         13. "Collateral Requirement" shall mean with respect to Loans an amount
equal to 102% of the then current  Market Value of Loaned  Securities  which are
the subject of Loans as of the close of trading on the preceding Business Day.

         14.  "Depository" shall mean the Depository Trust Company and any other
securities  depository or clearing agency (and their  respective  successors and
nominees)  registered  with the Securities and Exchange  Commission or otherwise
authorized to act as a securities depository or clearing agency.

         15.  "Distributions" shall mean interest,  dividends and other payments
and distributions payable by Borrowers in respect of Loaned Securities.

         16. "Government  Security" shall mean Book-entry  Securities as defined
in 31 C.F.R.  Part 357.2 and any other securities  issued or fully guaranteed by
the United States government or any agency,  instrumentality or establishment of
the United States government.

         17.  "Letter  of  Credit"  shall  mean  a  clean,   unconditional   and
irrevocable  letter of credit in favor of Bank as agent for  Lender  issued by a
bank  named on a list  supplied  to Lender by Bank (as such list may be  amended
from time to time),  other  than a bank  deleted  from such list  pursuant  to a
Certificate.


                                     - 2 -



         18. "Loan" shall mean a loan of Securities hereunder.

         19.  "Loaned  Security"  shall mean any Security  which is subject to a
Loan.

         20.   "Market   Value"  shall  mean  (a)  with  respect  to  Government
Securities,  the price of such  Securities  as quoted  by a  recognized  pricing
information  service at the time the determination of Market Value is made, plus
accrued  but unpaid  interest,  if any,  on the  particular  Security,  (b) with
respect  to other  Securities,  the  price of such  Securities  as  quoted  by a
recognized pricing  information  service at the time such determination is made,
plus  accrued but unpaid  interest,  if any,  to the extent not  included in the
price as quoted,  (c) with respect to Cash Collateral,  its amount, and (d) with
respect to Letters of Credit, the amount of such Letters of Credit.

         21.  "Oral  Instructions"  shall  mean  verbal  instructions   actually
received by Bank from an Authorized Person or from a person reasonably  believed
by Bank to be an Authorized Person.

         22.  "Proceeds"  shall mean any interest,  dividends and other payments
and  distributions  received  by Bank in  respect  of  Collateral  and  Approved
Investments.

         23.  "Rebate"  shall mean the amount payable by Lender to a Borrower in
connection with Loans at any time collateralized by Cash Collateral.

         24.  "Receipt" shall mean an advice or  confirmation  setting forth the
terms of a particular Loan.

         25. "Securities  Borrowing Agreement" shall mean the agreement pursuant
to which  Bank  lends  securities  to a  Borrower  on  behalf  of its  customers
(including Lender) from time to time.

         26.  "Securities  Loan Fee" shall mean the amount payable by a Borrower
to Bank pursuant to the Securities  Borrowing Agreement in connection with Loans
collateralized by Collateral other than Cash Collateral.

         27. "Security" shall include  Government  Securities,  common stock and
other equity securities,  bonds, debentures,  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.

         28. "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, facsimile, computer, video (CRT) terminal or other on-line system, or any
other  method  whereby  Bank is able  to  verify  with a  reasonable  degree  of
certainty  the  identity of the


                                     - 3 -



sender of such communications or the sender is required to provide a password or
other identification code.

                                   ARTICLE II
                 APPOINTMENT OF BANK; SCOPE OF AGENCY AUTHORITY
                 ----------------------------------------------

         1.  Appointment.  Lender  hereby  appoints  Bank as its  agent  to lend
Securities  in the Account to  Borrowers  from time to time  (except  Securities
which  Lender has advised  Bank in a  Certificate  are no longer  subject to the
representations  set forth in Article III,  sub-paragraph (e) hereof),  and Bank
hereby accepts appointment as such agent and agrees to so act.

         2. Securities Borrowing  Agreement.  Lender hereby acknowledges receipt
of Bank's standard form(s) of Securities Borrowing Agreement and authorizes Bank
to  lend  Securities  in  the  Account  to  Borrowers   pursuant  to  agreements
substantially in the form thereof.  Bank is hereby  authorized to negotiate with
each Borrower the amount of Rebates payable in connection with particular Loans.
Bank shall deliver to Lender a Receipt relating to each Loan.

         3. Loan  Opportunities.  Bank shall treat Lender  equitably  with other
lenders of like  circumstances in making lending  opportunities  available to it
hereunder, taking into account the demand for specific securities,  availability
of  securities,  types of collateral,  eligibility of borrowers,  limitations on
investments of cash collateral and such other factors as Bank deems appropriate.
Bank shall  nevertheless have the right to decline to make any Loans pursuant to
any  Securities  Borrowing  Agreement  and  to  discontinue  lending  under  any
Securities  Borrowing  Agreement in its sole  discretion  and without  notice to
Lender.

         4. Use of Book-Entry System and Depositories.  Lender hereby authorizes
Bank on a continuous and on-going basis, to deposit in the Book-Entry System and
the applicable  Depositories all Securities  eligible for deposit therein and to
utilize  the  Book-Entry  System  and  Depositories  to the extent  possible  in
connection  with its receipt and delivery of  Securities,  Collateral,  Approved
Investments and monies under this Agreement.  Where  Securities,  Collateral and
Approved  Investments  eligible  for  deposit  in  the  Book-Entry  System  or a
Depository are transferred to Lender hereunder, Bank shall identify as belonging
to Lender a quantity of securities  in a fungible  bulk of  securities  shown on
Bank's  account  on  the  books  of the  Book-Entry  System  or  the  applicable
Depository.  Securities,  Collateral and Approved  Investments  deposited in the
Book-Entry  System or a Depository will be represented in accounts which include
only assets held by Bank for customers, including but not limited to accounts in
which Bank acts in a fiduciary or agency capacity.



                                     - 4 -



                                  ARTICLE III
                         REPRESENTATIONS AND WARRANTIES
                         ------------------------------

         Lender hereby  represents and warrants to Bank,  which  representations
and warranties  shall be deemed to be continuing and to be reaffirmed on any day
that a Loan is outstanding, that:

            (a) This  Agreement  is, and each Loan will be,  legally and validly
entered into,  does not, and will 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,  and is
enforceable  against  Lender  in  accordance  with its  terms,  except as may be
limited by  bankruptcy,  insolvency or similar laws, or by equitable  principles
relating to or limiting creditors' rights generally;

            (b) The person  executing this Agreement and all Authorized  Persons
acting on behalf of Lender has and have been duly and properly  authorized to do
so;

            (c) If it is lending  Securities as principal for its own account it
will not  transfer,  assign or encumber  its interest in, or rights with respect
to, any Loans;

            (d) If it is acting as agent for one or more third  parties,  Lender
is either  authorized by virtue of standing  instructions or is a fiduciary with
the  authority  to enter  into,  execute  and bind such  third  parties  to this
Agreement  and the  Loans  effected  for  such  third  parties,  and  Lender  is
authorized to make,  and makes each of the  representations  and  warranties set
forth in sub-paragraphs (a) through (c) above for each such third party; and

            (e) All  Securities  in the Account are free and clear of all liens,
claims,  security interests and encumbrances and no such Security has been sold.
Lender shall  promptly  deliver to Bank a  Certificate  identifying  any and all
Securities which are no longer subject to the representations  contained in this
sub-paragraph (e).

                                   ARTICLE IV
                         SECURITIES LENDING TRANSACTIONS
                         -------------------------------

         1. General Bank  Responsibilities.  Bank shall enter Loans  pursuant to
the  Securities  Borrowing  Agreement and take all actions  deemed  necessary or
appropriate  in  order to  perform  on  Lender's  behalf  thereunder,  including
receiving  Collateral  having a Market  Value  of not less  than the  Collateral
Requirement,  collecting  Distributions and applicable Securities Loan Fees, and
demanding additional  Collateral from the appropriate  Borrowers when the Market
Value of Collateral  received by Bank from such  Borrowers is less than the then
current  Market  Value of all of the Loaned  Securities.  Whenever  Bank demands
additional  Collateral  pursuant to the foregoing,  such  additional  Collateral
together with the  Collateral  then held by Bank in connection  with Loans shall
have a Market Value of not less than the Collateral Requirement.


                                     - 5 -



         2. Approved Investments.

            (a) Bank is hereby  authorized and directed,  without  obtaining any
further approval from Lender, to invest and reinvest all or substantially all of
the Cash Collateral received in any Approved  Investment.  Bank shall credit all
Collateral,   Approved   Investments  and  Proceeds  received  with  respect  to
Collateral and Approved Investments to the Collateral Account and mark its books
and records to  identify  Lender's  interest  therein as  appropriate,  it being
understood that all monies  credited to the Collateral  Account may for purposes
of  investment  be  commingled  with cash  collateral  held for other lenders of
securities  for whom Bank acts as their  respective  agent.  Bank  reserves  the
right, in its sole discretion,  to liquidate any Approved  Investment and credit
the net proceeds to the Collateral Account.

            (b)  Lender  may  deliver  to Bank a  Certificate  from time to time
instructing  Bank not to make Approved  Investments  with  particular  financial
institutions or issuers.

            (c) All  Approved  Investments  shall be for the account and risk of
Lender. To the extent any loss arising out of Approved  Investments results in a
deficiency  in the amount of  Collateral  available  for  return to a  Borrower,
Lender agrees to pay Bank on demand cash in an amount equal to such deficiency.

            (d) Except as otherwise  provided herein,  all Collateral,  Approved
Investments and Proceeds credited to the Collateral  Account shall be controlled
by,  and  subject  only to the  instructions  of,  Bank,  and Bank  shall not be
required to comply with any instructions of Lender with respect to the same.

         3. Termination of Loans.

            (a) Bank shall terminate any Loan:

                  (i) upon  receipt  by Bank of a notice of  termination  from a
Borrower;

                  (ii) upon receipt by Bank of Written Instructions to do so;

                  (iii) upon receipt by Bank of a Certificate  instructing it to
delete  the  Borrower  to whom such Loan was made from the list  referred  to in
Article I, paragraph 6 hereof;

                  (iv) upon receipt by Bank of a  Certificate  advising that the
Loaned Security is no longer subject to the representations contained in Article
III, sub-paragraph (e) hereof;


                                     - 6 -



                  (v) upon receipt by Bank of notice or a  Certificate  advising
that an Event of Default (as defined in the Securities  Borrowing Agreement) has
occurred and is continuing beyond any applicable grace period;

                  (vi)  whenever  Bank,  in  its  sole  discretion,   elects  to
terminate such Loan; or

                  (vii) upon termination of this Agreement.

            (b) Upon termination of any Loan (which shall be effected  according
to the standard  settlement time for trades in the particular  Loaned  Security)
and receipt from the  Borrower of the Loaned  Securities  and any  Distributions
then due,  Bank shall return to the  Borrower  such amount of  Collateral  as is
required by the Securities  Borrowing Agreement and pay the Borrower any Rebates
then payable.

            (c)  In  order  for  Bank  to  timely  settle  the  sale  of  Loaned
Securities, it shall be Lender's responsibility to ensure prompt notification to
Bank regarding any such sale.

         4.  Securities  Loan Fee. Bank shall receive any applicable  Securities
Loan  Fee  paid by  Borrowers  and  credit  all  such  amounts  received  to the
Collateral Account.

         5. Guarantee and Subrogation.

            (a) If as a  result  of an Act of  Insolvency  a  Borrower  fails to
return  any  Loaned  Securities,  Bank  shall  take all  actions  which it deems
necessary or appropriate  to liquidate  Approved  Investments  and Collateral in
connection  with Loans to such  Borrower  and,  unless  advised by Lender to the
contrary, shall make a reasonable effort for two Business Days (the "Replacement
Period") to apply the proceeds  thereof to the purchase of Securities  identical
to  the  Loaned  Securities  (or  the  equivalent  thereof  in  the  event  of a
reorganization or  recapitalization  of the issuer) not returned.  If during the
Replacement  Period the  Collateral  liquidation  proceeds are  insufficient  to
replace  any of the Loaned  Securities  not  returned,  Bank  shall,  subject to
satisfaction of Lender's  obligations under paragraph 2(c) of this Article,  pay
such additional amounts as are necessary to make such replacement.  Purchases of
replacement  Securities  shall be made only in such markets,  in such manner and
upon such  terms as Bank  shall  consider  appropriate  in its sole  discretion.
Replacement Securities shall be credited to the Account upon receipt by Bank. If
Bank is  unsuccessful  in  purchasing  any  replacement  Securities  during  the
Replacement Period, the proceeds of the liquidation of Approved  Investments and
Collateral  pursuant  hereto shall be credited to the  Account,  and Bank shall,
subject to  satisfaction  of Lender's  obligations  under paragraph 2(c) of this
Article,  credit  to the  Account  cash in an amount  (if any)  equal to (X) the
Market Value of the Loaned  Securities  not returned,  minus (Y) the  Collateral
liquidation proceeds, such calculation to be made on the date of such credit.


                                     - 7 -



            (b) Lender  agrees,  without the  execution of any  documents or the
giving of any notice, that Bank is and will remain subrogated to all of Lender's
rights under the Securities  Borrowing  Agreement or otherwise (to the extent of
any credit  pursuant to  paragraph  5(a) above),  including  but not limited to,
Lender's  rights  with  respect  to Loaned  Securities  and  Distributions,  and
Collateral,  Approved  Investments  and  Proceeds.  Lender agrees to execute and
deliver  to Bank such  documents  as Bank may  require  and to  otherwise  fully
cooperate with Bank to give effect to its rights of subrogation hereunder.

            (c) Bank shall have no  obligation  to take any actions  pursuant to
paragraph 5(a) above if it believes that such action will violate any applicable
statute, regulation, rule, order or judgment. Furthermore, except as provided in
paragraph  5(a),  Bank shall have no other  liability to Lender  relating to any
Borrower's failure to return Loaned Securities and no duty or obligation to take
action to effect  payment by a Borrower  of any  amounts  owed by such  Borrower
pursuant to the Securities Borrowing Agreement.

            (d) Either party may  terminate  the  provisions  of paragraph  5(a)
above with  respect to any  Borrower  at any time by delivery of a notice to the
other party  specifying a termination  date not earlier then the date of receipt
of such notice by the other party. No such  termination  shall be effective with
respect  to then  existing  rights of either  party  under this  paragraph  5 or
outstanding Securities Loans hereunder.

            (e) Bank may  offset  any  amounts  payable  by  Lender  under  this
Agreement against amounts payable by Bank under paragraph 5(a) of this Article.

         6.  Taxes.  Lender  shall be  solely  responsible  for all tax  matters
arising in connection  with Loans and Approved  Investments,  including  without
limitation,  determinations  of whether or not any Loan or  Approved  Investment
results in liability to it for income tax,  capital gains tax,  value added tax,
withholding tax, stamp duties,  transfer taxes or any other taxes,  assessments,
duties and other  governmental  charges,  including any interest or penalty with
respect  thereto  ("Taxes").  Lender shall  indemnify Bank for the amount of any
Taxes that Bank or any  withholding  agent is  required  under  applicable  laws
(whether  by  assessment  or  otherwise)  to pay on behalf  of, or in respect of
income  earned by or  payments  or  distributions  made to or for the account of
Lender (including any payment of Tax required by reason of an earlier failure to
withhold).  In the event that Bank or any  withholding  agent is required  under
applicable law to pay any Tax on behalf of Lender,  Bank is hereby authorized to
withdraw  cash from any cash account in the amount  required to pay such Tax and
to use such cash for the timely  payment of such Tax in the manner  required  by
applicable  law.  If the  aggregate  amount of cash in such cash  account is not
sufficient to pay such Tax, Bank shall promptly  notify Lender of the additional
amount of cash (in the appropriate currency) required, and Lender shall directly
deposit such additional  amount in the appropriate  cash account


                                     - 8 -



promptly after receipt of such notice,  for use by Bank as specified  herein. In
no event shall Bank be responsible for collecting any Taxes from Borrowers.

                                   ARTICLE V
                                 CONCERNING BANK
                                 ---------------

         1. Standard of Care; Reimbursement.

            (a) 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 or claims arising out
of the  negligence,  bad faith or wilful  misconduct of Bank. Bank shall have no
obligation  hereunder  for  costs,  expenses,  damages,  liabilities  or  claims
(including attorneys' and accountants' fees), which are sustained or incurred by
reason of any action or inaction by the  Book-Entry  System or any Depository or
their  respective  successors or nominees.  In no event shall Bank be liable for
special, indirect or consequential damages, or lost profits or loss of business,
arising under or in connection with this Agreement,  even if previously informed
of the possibility of such damages and regardless of the form of action.

            (b) Except for any costs or expenses  incurred by Bank in performing
its obligations  pursuant to paragraph 5(a) of Article IV hereof,  Lender agrees
to  reimburse  Bank and to hold it harmless  from and against any and all costs,
expenses, damages, liabilities or claims, including reasonable fees and expenses
of counsel incurred by Bank in a successful  defense of claims by Lender,  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
under this Agreement, other than those costs, expenses, damages,  liabilities or
claims arising out of the negligence,  bad faith or willful  misconduct of Bank.
The foregoing  shall be a continuing  obligation of Lender,  its  successors and
assigns,  notwithstanding  the  termination  of any Loans  hereunder  or of this
Agreement. Bank may charge any amounts to which it is entitled hereunder against
the  Account.  Actions  taken  or  omitted  in  reliance  upon  Oral or  Written
Instructions, any Certificate, or upon any information,  order, indenture, stock
certificate,  power of  attorney,  assignment,  affidavit  or  other  instrument
reasonably  believed by Bank to be genuine or bearing the  signature of a person
or persons reasonably believed to be authorized to sign,  countersign or execute
the same,  shall be conclusively  presumed to have been taken or omitted in good
faith.

         2. No Obligation  to Inquire.  Without  limiting the  generality of the
foregoing,  Bank shall be under no obligation to inquire into,  and shall not be
liable for, the validity of the issue of any Securities,  Collateral or Approved
Investments  held in the  Account or  Collateral  Account,  or the  legality  or
propriety of any Loans hereunder.

         3. Reliance on Borrowers'  Statements,  Representations and Warranties.
Provided that it acts with reasonable  care, Bank shall be entitled to rely upon
the most  recently  available  audited and  unaudited  statements  of  financial
condition and


                                     - 9 -



representations  and warranties made by Borrowers,  and Bank shall not be liable
for any loss or damage suffered as a result of any such reliance.

         4. Advances, Overdrafts and Indebtedness; Security Interest.

            (a) Bank may,  in its sole  discretion,  advance  funds to Lender in
order to pay to Borrowers any Rebates or to return to Borrowers Cash  Collateral
to which  they are  entitled.  Bank may also  credit the  Account or  Collateral
Account with  Securities  Loan Fees  payable by  Borrowers  prior to its receipt
thereof.  Any such credit  shall be  conditional  upon  receipt by Bank of final
payment and may be reversed to the extent final payment is not received.

            (b) Lender  agrees to repay Bank on demand the amount of any advance
or any other amount owed by Lender hereunder plus accrued interest at a rate per
annum (based on a 360-day year for the actual  number of days  involved)  not to
exceed the fed funds rate as  publicly  announced  to be in effect  from time to
time,  such rate to be adjusted on the effective  date of any change in such fed
funds rate, but in no event less than 6% per annum. In order to secure repayment
of any advance or other indebtedness of Lender to Bank arising hereunder, Lender
hereby  agrees that Bank shall have a continuing  lien and security  interest in
and to all  assets  now or  hereafter  held in the  Account  and the  Collateral
Account (held on Lender's  behalf) 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; provided that Bank shall have no lien or security
interest  hereunder in any Security issued or guaranteed by a BNY Affiliate.  In
connection  with the  foregoing,  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.

         5. Advice of Counsel. Bank may, with respect to questions of law, apply
for and obtain the advice and  opinion of counsel  and shall be fully  protected
with respect to anything done or omitted by it in good faith in conformity  with
such advice or opinion.

         6. No Collection Obligations. Bank shall be under no obligation or duty
to take action to effect collection of, or be liable for, any amounts payable in
respect of Securities  or Approved  Investments  if such  Securities or Approved
Investments  are in  default,  or if  payment  is  refused  after due demand and
presentation.

         7.  Pricing  Services.  Bank is  authorized  to utilize any  recognized
pricing information  service in order to perform its valuation  responsibilities
with respect to Loaned  Securities,  Collateral  and Approved  Investments,  and
Lender agrees to hold Bank harmless from and against any loss or damage suffered
or incurred as a result of errors or omissions  of any such pricing  information
service.


                                     - 10 -



         8.  Agent's Fee. For its  performance  as Lender's  agent in making and
administering  Loans,  Lender shall pay to Bank a fee calculated as set forth in
Schedule II hereto.  Bank is authorized,  on a monthly basis, to charge its fees
and any other  amounts  owed by Lender  hereunder  against  the  Account  and/or
Collateral Account.

         9. Reliance On Certificates and Instructions. Bank shall be entitled to
rely upon any Certificate, Written or Oral Instruction actually received by Bank
and reasonably  believed by Bank to be duly  authorized  and  delivered.  Lender
agrees to forward to Bank Written  Instructions  confirming Oral Instructions in
such manner so that such Written  Instructions are received by Bank by the close
of  business  of the same day that  such  Oral  Instructions  are given to Bank.
Lender agrees that the fact that such confirming  Written  Instructions  are not
received  or that  contrary  instructions  are  received by Bank shall in no way
affect the validity or enforceability of the transactions  authorized by Lender.
In this regard,  the records of Bank shall be presumed to reflect accurately any
Oral Instructions  given by an Authorized Person or a person believed by Bank to
be an Authorized Person.

         10. Disclosure of Account Information. It is understood and agreed that
Bank is authorized to supply any information regarding the Account or Collateral
Account  which is  required  by any  statute,  regulation,  rule or order now or
hereafter in effect.

         11.  Statements.  Bank  will  at  least  monthly  furnish  Lender  with
statements relating to Loans hereunder.

         12.  Force  Majeure.  Bank shall not be  responsible  or liable for any
failure or delay in the  performance  of its  obligations  under this  Agreement
arising out of or caused,  directly or indirectly,  by circumstances  beyond its
control, including without limitation, acts of God; earthquakes;  fires; floods;
wars; civil or military disturbances; sabotage; epidemics; riots; interruptions,
loss  or  malfunctions  of  utilities,  transportation,  computer  (hardware  or
software) or communications service; accidents; labor disputes; acts of civil or
military  authority;   governmental  actions;  or  inability  to  obtain  labor,
material, equipment or transportation.

         13. No Implied  Duties.  Bank shall have no duties or  responsibilities
whatsoever except such duties and responsibilities as are specifically set forth
in this Agreement,  and no covenant or obligation  shall be implied against Bank
in connection with this Agreement.

                                   ARTICLE VI
                                   TERMINATION
                                   -----------

         This  Agreement  may be  terminated  at any time by either  party  upon
delivery  to the other  party of a written  notice  specifying  the date of such
termination,  which  shall be not less than 45 days after the date of receipt of
such notice.  Notwithstanding  any such


                                     - 11 -



notice,  this Agreement  shall continue in full force and effect with respect to
all Loans outstanding on the date of termination.

                                  ARTICLE VII
                                  MISCELLANEOUS
                                  -------------

         1.  Exclusivity.  Lender  agrees that it shall not enter into any other
agreement  with any third party  whereby  such third party is  permitted to make
loans on behalf of Lender of Securities held by Bank from time to time.

         2. Certificates.  Lender agrees to furnish to Bank a new Certificate in
the event that any present  Authorized  Person ceases to be an Authorized Person
or in the event that any other Authorized  Persons are appointed and authorized.
Until such new Certificate is received,  Bank shall be fully protected in acting
upon Oral Instructions or signatures of the present Authorized Persons.

         3. Notices.

            (a) Any  notice  or  other  instrument  in  writing,  authorized  or
required by this Agreement to be given to Bank,  shall be sufficiently  given if
addressed  to Bank and  received by it at its offices at 32 Old Slip,  New York,
New York 10286,  Attention:  Securities Lending Division, or at such other place
as Bank may from time to time designate in writing.

            (b) Any  notice  or  other  instrument  in  writing,  authorized  or
required by this Agreement to be given to Lender shall be sufficiently  given if
addressed to Lender and received by it at its office at:

TDAX Funds, Inc.
c/o XShares Advisors LLC
attn: Roger Braunfeld
420 Lexington Avenue
New York, New York 10170

,or at such other place as Lender may from time to time designate in writing.

         4.  Cumulative  Rights and No Waiver.  Each and every right  granted to
Bank hereunder or under any other document delivered  hereunder or in connection
herewith,  or  allowed  it by law or  equity,  shall  be  cumulative  and may be
exercised from time to time. No failure on the part of Bank to exercise,  and no
delay in exercising,  any right will operate as a waiver  thereof,  nor will any
single or partial  exercise  by Bank of any right  preclude  any other or future
exercise thereof or the exercise of any other right.

         5.  Severability.  In case any  provision in or  obligation  under this
Agreement shall be invalid,  illegal or unenforceable in any  jurisdiction,  the
validity, legality and


                                     - 12 -



enforceability  of the remaining  provisions or obligations shall not in any way
be affected or impaired  thereby,  and if any provision is  inapplicable  to any
person or circumstances,  it shall  nevertheless  remain applicable to all other
persons and circumstances.

         6. Entire Agreement;  Amendments.  This Agreement represents the entire
understanding  of the parties hereto with regard to the subject matter contained
herein  and may not be  amended or  modified  in any manner  except by a written
agreement executed by both parties.

         7. Successors and Assigns.  This Agreement shall extend to and shall be
binding upon the parties hereto,  and their  respective  successors and assigns;
provided,  however,  that this Agreement shall not be assignable by either party
without the written consent of the other.

         8. Governing Law;  Consent to  Jurisdiction;  Waiver of Immunity;  Jury
Trial Waiver.  This Agreement  shall be construed in accordance with the laws of
the State of New York,  without regard to conflict of laws  principles  thereof.
Lender 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.  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 agrees not
to claim,  and it hereby  waives,  such  immunity.  Lender and Bank each  hereby
irrevocably  waives any and all rights to trial by jury in any legal  proceeding
arising out of or relating to this Agreement.

         9. No Third  Party  Beneficiaries.  In  performing  hereunder,  Bank is
acting  solely on behalf of Lender and no  contractual  or service  relationship
shall be deemed to be established hereby between Bank and any other person.

         10.  Counterparts.  This  Agreement  may be  executed  in any number of
counterparts,  each of  which  shall  be  deemed  to be an  original,  but  such
counterparts shall, together, constitute only one instrument.

         11. Notice to Lender.  Lender hereby  acknowledges that Bank is subject
to  federal   laws,   including  the  Customer   Identification   Program  (CIP)
requirements  under  the  USA  PATRIOT  Act and  its  implementing  regulations,
pursuant to which Bank must obtain,  verify and record  information  that allows
Bank to identify Lender. Accordingly, prior to opening an Account hereunder Bank
will ask Lender to provide certain  information  including,  but not limited to,
Lender's name, physical address, tax identification number and other information
that  will  help  Bank  to  identify  and  verify  Lender's   identity  such  as
organizational documents,  certificate of good standing, license to do business,
or other pertinent identifying information.  Lender agrees that Bank cannot open
an Account hereunder unless and until the Bank verifies the Lender's identity in
accordance with its CIP.



                                     - 13 -



         12. SIPA NOTICE. THE PROVISIONS OF THE SECURITIES  INVESTOR  PROTECTION
ACT OF 1970  MAY NOT  PROTECT  LENDER  WITH  RESPECT  TO  LOANS  HEREUNDER  AND,
THEREFORE,  THE COLLATERAL  DELIVERED TO BANK AS AGENT FOR LENDER MAY CONSTITUTE
THE ONLY SOURCE OF  SATISFACTION  OF A BORROWER'S  OBLIGATION  IN THE EVENT SUCH
BORROWER FAILS TO RETURN THE LOANED SECURITIES.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporate officers,  thereunto duly authorized,  as
of the day and year first above written.

                                     TDAX Funds, Inc.,
                                     on behalf of each of the Lenders

                                     By: __________________________

                                     Title:



                                     THE BANK OF NEW YORK

                                     By:__________________________

                                     Title:


                                     - 14 -





                                    EXHIBIT A
                                     SERIES

TDAX Independence 2010 Exchange-Traded Fund

TDAX Independence 2020 Exchange-Traded Fund

TDAX Independence 2030 Exchange-Traded Fund

TDAX Independence 2040 Exchange-Traded Fund

TDAX Independence In-Target Exchange-Traded Fund



                                     - 15 -




                                   SCHEDULE I
                              APPROVED INVESTMENTS

         Bank is hereby authorized to invest and reinvest Cash Collateral in the
following  investments.  Ratings  descriptions  specified  in  any  category  of
investments  listed  below  shall  mean  the  rating  that  is  assigned  to the
investment at the time that it is acquired.


Investment
----------

Securities  issued or fully  guaranteed by the United States  government and any
agency,  instrumentality  or  establishment  of  the  United  States  government
("Government Securities").

Obligations  issued by the  central  government  of any  member  country  of the
Organization  for  Economic  Co-operation  and  Development  and any  agency  or
instrumentality thereof (currency hedged) ("OECD Securities").

High-grade  commercial paper, notes, bonds and other debt obligations  including
promissory notes,  master notes,  funding  agreements and guaranteed  investment
contracts  whether  or not  registered  under  the  Securities  Act of 1933,  as
amended.  Such obligations may have fixed,  floating,  or variable rate interest
payment  provisions.  Obligations  maturing  within  one year shall be issued by
issuers  rated  at  least  A-1 (by  Standard  &  Poor's)  or P-1  (by  Moody's).
Obligations maturing beyond one year shall be issued by issuers rated at least A
(by Standard & Poors) or A2 (by Moody's).

Asset-Backed  Securities  which  carry the highest  credit  rating by Standard &
Poors or Moody's.

Certificates of deposit, time deposits and other bank obligations of U.S. banks,
their branches and  subsidiaries,  and the branches and  subsidiaries of foreign
banks.  Obligations  maturing within one year shall be issued by banks (or their
subsidiaries)  rated at least A-1 (by  Standard & Poor's)  or P-1 (by  Moody's).
Obligations  maturing  after  one  year  shall be  issued  by  banks  (or  their
subsidiaries) rated A (by Standard & Poor's) or A-2 (by Moody's).

Repurchase  and  reverse  repurchase   agreements   collateralized  by  Approved
Investments  listed on this  Schedule  I and  entered  into with  counterparties
approved by The Bank of New York.

Securities,  units,  shares  and other  participations  in money  market  funds,
unregistered  short-term  investment  funds,  pools or trusts  (including  those
managed by The Bank of New York).


                                     - 16 -



Maturities
----------

Government  Securities and OECD Securities  have no maturity  limit.  Fixed Rate
Instruments  shall have a  maturity  no greater  than 13 months.  Floating  Rate
Instruments shall have maturities as follows:
     "A" & "AA" Rated  Instruments  no greater  than three  years with resets no
     less frequent than 3 months,  "AAA" Rated  Instruments no greater than five
     years with resets no less frequent than 3 months.


Dated:_____________

                                        TDAX Funds, Inc.,
                                        on behalf of each of the Lenders

                                        By:      __________________________

                                        Name:    __________________________

                                        Title:   __________________________



                                     - 17 -



                                   SCHEDULE II
                                    AGENT FEE

         Agent shall  receive a fee for each month  equal to seven basis  points
(0.07%) of the weighted  average  daily  Market  Value of the Loaned  Securities
during that month.


Dated:_____________

                                        TDAX Funds, Inc.,
                                        on behalf of each of the Lenders

                                        By:      __________________________

                                        Name:    __________________________

                                        Title:   __________________________




                                        THE BANK OF NEW YORK

                                        By:      __________________________

                                        Name:    __________________________

                                        Title:   __________________________


                                     - 18 -





                                                                  Exhibit (h)(4)

                   CHIEF COMPLIANCE OFFICER SERVICES AGREEMENT

         CHIEF COMPLIANCE OFFICER SERVICES AGREEMENT (this "Agreement") dated
July 24, 2007 between TDAX FUNDS, INC. (the "Fund"), and ALPS FUND SERVICES,
INC. ("ALPS"), a Colorado corporation. The "Effective Date" of this Agreement is
July 24, 2007.

         In an effort to ensure that the Fund is in compliance with Rule 38a-1
(the "Rule") under the Investment Company Act of 1940, as amended (the "1940
Act"), ALPS has agreed to render services to the Fund on behalf of each
portfolio series of the Fund (each such series, a "Portfolio") as listed on
Exhibit C hereto, which is hereby incorporated into and made a part of this
Agreement and which may be updated from time to time, by entering into a written
agreement with respect thereto effective from and after the Effective Date.

         ACCORDINGLY, in consideration of the foregoing premises and the mutual
covenants and agreements contained in this Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Fund and ALPS hereby agree as set forth below.

SECTION 1. Term of Agreement.

         The Fund hereby retains ALPS, on behalf of each Portfolio, for a period
beginning on the Effective Date and ending July 31, 2008 subject to early
termination as provided in Sections 8 and 9 (collectively, with each successive
one-year period as renewed below, the "Term"). This Agreement shall be
automatically renewed for an additional one year Term commencing on
August 1, 2008 and ending on  July 31, 2009 unless the Fund, for any
or no reason, notifies ALPS in writing prior to the commencement of such
additional one year term that this Agreement will not be renewed. This Agreement
may be renewed for additional one-year periods beyond the Term by mutual
agreement, which agreement shall be in writing signed by both ALPS and Fund and
shall be entered into no later than the last day of the Term.

SECTION 2. Duties.

         (a) ALPS shall designate, subject to the Fund's approval, one of its
own employees to serve as Chief Compliance Officer of the Fund and each
Portfolio of the Fund within the meaning of the Rule (such individual, the
"CCO"). The CCO shall render to the Fund such advice and services ("Services")
as are required to be performed by a CCO under the Rule and as are set forth on
Exhibit A hereto, as such exhibit may be modified from time to time by written
agreement of the parties hereto. Exhibit A is hereby incorporated into and made
a part of this Agreement. The Fund acknowledges that other employees of ALPS
will assist the CCO in the performance of his duties hereunder. Phil Perrone
will lead the engagement and will have overall supervisory responsibility for
the ongoing obligations hereunder. A brief biography for Phil Perrone is
attached as Exhibit B hereto.




         (b) During the Term, the CCO shall report to such individuals as may be
designated from time to time by the Board of the Fund, subject to the provisions
of Exhibit A. Upon designation by ALPS and approval of the Fund, each CCO,
before commencing provision of the Services, shall acknowledge in writing having
read and understood this Agreement in its entirety.

         (c) The parties agree that only employees of ALPS shall act as CCO or
otherwise perform services to the Fund under this Agreement unless otherwise
agreed in writing by the Fund. Notwithstanding his other duties for ALPS or any
other investment company, the CCO shall perform the Services in a professional
manner and shall devote appropriate time, energies and skill to the Services.

         (d) The Fund acknowledges that the CCO may act as Chief Compliance
Officer within the meaning of the Rule for other investment companies, and
nothing herein shall be construed to prohibit the CCO from acting in such
capacity; provided, however, that during the Term neither ALPS nor the CCO shall
enter into any agreement, arrangement or understanding which would conflict with
this Agreement or prevent ALPS or the CCO from performing its or his obligations
hereunder.

         (e) In connection with the Fund's approval of any CCO and with the
Fund's ongoing evaluation of any CCO then in service, ALPS shall cooperate in
good faith and provide any documentation reasonably requested by the Fund and
shall make its relevant employees available to the Fund for consultation.

         (f) The Fund shall cooperate in good faith with ALPS and the CCO in
order to assist in the performance of the Services. In furtherance of this
agreement to cooperate, the Fund shall make those of its and its Affiliates'
officers, employees and outside counsel available for consultation with ALPS and
the CCO and shall communicate with the board of directors of the Fund (the
"Board") and the service providers(1) of the Fund (for purposes of this
Agreement, the Board and such other service providers collectively, the "Service
Providers") in each case as ALPS or the CCO may reasonably request. The Fund
shall provide ALPS and the CCO with the names of appropriate contact people at
the Service Providers and shall make introductions and otherwise assist ALPS and
the CCO in obtaining the cooperation of the Service Providers. The Fund shall
provide ALPS and the CCO with such books and records regarding the Fund as ALPS
and the CCO may reasonably request.

SECTION 3. Fee.

         (a) As compensation for the timely and satisfactory performance of the
Services on behalf of each index fund Portfolio that has been seeded, up to
twenty (20) Portfolios of the Fund, with the same Service Providers and
investment strategy as the Portfolios, the Fund shall pay to ALPS, or shall
cause the Fund to pay to ALPS, during the Term an annual fee of: $175,000
commencing on the Effective Date paid 1/12 on a monthly basis (or a pro rata
portion thereof for a partial month) (the "Fee"). For each additional Portfolio
added to the Fund in excess of twenty (20) Portfolios, an additional fee of
$10,000 per year per such additional Portfolio (with an appropriate proration of
such $10,000 in the first 12 month period that such additional

___________________________________
(1)      Includes the Fund's investment adviser, X Shares Advisors LLC, the
Fund's administrator, transfer agent and investment subadviser, and the Fund's
distributor, ALPS Distributors, Inc.





Portfolio is added to the Fund, on the basis of the number of days that the
added Portfolio(s) is in existence during such first 12 month period) shall be
added to the annual fee set forth in the preceding sentence. The Fee shall be
payable by the Fund within 30 days of its receipt of an invoice from ALPS, which
invoices shall include amounts for any expenses reimbursable under Section 4
hereof. In the event that the Funds are not made available to the public within
6 months of the date of this Agreement a fee of $175,000 will be immediately due
and payable to compensate ALPS for the substantial amount of work and resources
devoted to creating and developing the compliance program contracted for under
the terms of this Agreement.

         (b) The CCO shall not receive and shall not make any claim under this
Agreement or otherwise against the Fund for compensation, workers' compensation,
unemployment insurance compensation, or life insurance, social security
benefits, disability insurance benefits or any other benefits. ALPS is solely
responsible for payment of any such compensation or benefits to the CCO, and
ALPS shall withhold on behalf of the CCO the required sums for income tax,
unemployment insurance or social security pursuant to any law or requirement of
any government agency including, without limitation, unemployment tax, federal,
state or foreign income tax, federal social security (FICA) payments and
disability insurance taxes; provided, that the Board, including a majority of
the directors who are not interested persons of the Fund, shall have the power
to approve any and all compensation to the CCO provided by ALPS. ALPS and the
CCO shall make such tax payments as may be required by applicable law and shall
indemnify and hold the Fund harmless from any liability that the Fund may incur
as a consequence of ALPS's or the CCO's failure to make any such tax payment(s).

         (c) ALPS and the CCO shall perform the services hereunder as
independent contractors and not as employees of the Fund, although the CCO shall
be an employee of ALPS. As independent contractors, neither ALPS nor the CCO is,
and neither shall represent itself or himself to third parties as being, the
agent or representative of the Fund, except as specifically set forth herein.
Neither ALPS nor the CCO have, and shall not represent itself or himself to
third parties as having, actual or apparent power or authority to do or take any
action for or on behalf of the Fund, as its agent, representative or otherwise,
except as specifically set forth herein.

SECTION 4. Reimbursement of Expenses.

         During the Term, the Fund shall reimburse ALPS for all reasonable and
customary travel and lodging expenses and other out-of-pocket disbursements
incurred by ALPS for or on behalf of the Fund in connection with the performance
of ALPS's or the CCO's duties hereunder; provided, that ALPS provide the Fund
with appropriate receipts and other reasonable documentation as the Fund may
request; and further provided, that the Fund is not obligated to reimburse ALPS
for any portion of such expenses or disbursements that the Fund deems to be
unreasonable or excessive.

SECTION 5. Disclosure of Information.

         (a) From and after the date hereof, neither ALPS nor the CCO shall use
or disclose to any Person, except as required in connection with the performance
of the Services and in compliance with the terms of this Agreement and as
required by law, regulation or judicial process, any Confidential Information
(as defined in Section 5(b)), for any reason or purpose whatsoever, nor




shall ALPS or the CCO make use of any Confidential Information for ALPS's or the
CCO's purposes or for the benefit of any Person (as defined below) except the
Fund or the Fund's Affiliates (as defined below). ALPS shall maintain
commercially reasonable information security policies and procedures for
protecting Confidential Information. For purposes of this Agreement, an
"Affiliate" is an individual or entity (collectively, "Person") controlling or
controlled by or under common control with the Fund.

         (b) For purposes of this Agreement, "Confidential Information" means
(i) the non-public intellectual property rights of X Shares Advisors LLC, the
Board, the Fund and the Fund's Affiliates and (ii) all other information of a
proprietary or confidential nature in whatever form relating to X Shares
Advisors LLC, the Board, the Fund or the Fund's Affiliates, or the business or
assets of X Shares Advisors LLC, the Fund or the Fund's Affiliates, including,
without limitation, investment advisory contracts, portfolio holdings, insider
trading policies and procedures, best execution evaluations books, compliance
manuals and guidelines, records, customer and registered user lists, vendor
lists, supplier lists, customer agreements, vendor agreements, supplier
agreements, incentive and commission program information, distribution channels,
pricing information, cost information, business and marketing plans, strategies,
forecasts, financial statements, budgets and projections, technology, and all
information related to the quantitative securities benchmarks, along with
associated service marks, together with any applications or registrations now or
hereinafter issued on said service marks, on which each Portfolio's investment
strategy is based. Confidential Information does not include (i) information in
the public domain not as a result of a breach by ALPS or the CCO of this
Agreement, (ii) information lawfully received by ALPS or the CCO from a third
Person who had the legal or contractual right to disclose such information to
ALPS or to the CCO, and (iii) information developed by ALPS's or the CCO's own
independent knowledge, skill and know-how.

         (c) ALPS and the CCO agree to promptly notify the Fund of any request
for records or any subpoena by any governmental agency or third party. In the
event that ALPS or the CCO is requested by legal process to disclose
Confidential Information, ALPS shall notify the Fund thereof and shall cooperate
with the Fund and the Board, as appropriate, at the expense of the Fund or the
Board, as appropriate, in any action that such entity may desire to take to
protect its Confidential Information.

SECTION 6. Assignment of Written Materials.

         During the Term, ALPS and the CCO shall promptly disclose, and hereby
grant and assign to the Fund for its sole use and benefit, any and all technical
information, data, procedures, records, suggestions and other materials, insofar
as they are reduced to writing, including without limitation the Compliance
Program of the Fund (as that term is defined in Exhibit A), that are reasonably
related to the Fund (collectively, the "Materials") which ALPS or the CCO may
develop or acquire during the Term (whether or not during usual working hours),
together with all copyrights and reissues thereof that may at any time be
granted for or with respect to the Materials. For the avoidance of doubt, the
Materials shall include all records referred to in Exhibit A. The Materials
shall constitute Confidential Information within the meaning of Section 5.




SECTION 7. Delivery of Materials Upon Termination of Term.

         ALPS shall promptly deliver to the Fund at the termination of the Term,
or at any time upon the Fund's request, the Materials and all memoranda, notes,
plans, records, reports, software and other documents and data (and copies
thereof existing in any media) relating to the Confidential Information,
inventions or the business of the Fund or any of its Affiliates that it or the
CCO may then possess or have under its or his control regardless of the location
or form of such material and, if requested by the Fund, will provide the Fund
with written confirmation that all such materials have been delivered to the
Fund.

SECTION 8. Termination.

         (a) The Fund shall have the right to terminate this Agreement, without
the payment of any penalty, as to each Portfolio immediately in the event of:

                  (i) a vote of the Board, including a majority of the directors
         who are not interested persons of the Fund, upon ninety (90) days'
         prior written notice to ALPS; provided however, that no prior notice is
         required if termination is for Cause (defined below). For purposes of
         this Agreement, "Cause" shall be defined as: (1) willful misfeasance,
         bad faith or negligence in connection with the performance of the
         duties by the CCO under this Agreement, (2) failure of the CCO to
         perform his duties under this Agreement, after written notice and a
         thirty (30) day period to cure, (3) the CCO's indictment for,
         conviction of, or entry of a plea of no contest with respect to, any
         felony, (4) the CCO's resignation or (5) the determination by the
         Board, including a majority of the directors who are not interested
         persons of the Fund, in its sole discretion, that it has lost
         confidence in the CCO's effectiveness as the CCO of the Trust. ALPS
         agrees that it will report to the Fund's officers or the Board promptly
         if ALPS learns that the CCO has engaged in any conduct or been subject
         to any of the actions described in clauses (1) through (5) above;

                  (ii) the deregistration of the Fund under the 1940 Act;

                  (iii) a change in the 1940 Act, the Rule or other applicable
         law or regulation, or the interpretation of any of the foregoing by the
         Securities and Exchange Commission or other regulatory or judicial
         authority with appropriate jurisdiction, that results in the
         arrangement created by this Agreement no longer satisfying the Board or
         the Fund's obligations under the Rule;

                  (iv) subject to the provisions of Section 2(d), any failure of
         ALPS to employ a CCO for the Fund acceptable to the Fund; or

                  (v) any assignment of this Agreement. An internal
         reorganization of any party (which does not result in a change in the
         nature, scope and quality of services provided hereunder) shall not, by
         itself, constitute an assignment of this Agreement.





         In the event of the termination or dissolution of a particular
Portfolio, this Agreement shall be terminated as to that Portfolio and shall
continue with respect to the non-terminating or non-dissolving Portfolio.

         (b) ALPS shall have the right to terminate this Agreement, without the
payment of any penalty, as to each Portfolio immediately in the event of:

                  (i) a failure by the Fund to meet its obligations hereunder or
         a breach of the Fund's representations and warranties hereunder, if
         such failure or breach goes uncured for a period of thirty (30) days
         after the Fund receives written notice of such failure from ALPS;

                  (ii) the termination or dissolution of the Fund, or the
         deregistration of the Fund under the 1940 Act; or

                  (iii) a change in the 1940 Act, the Rule or other applicable
         law or regulation, or the interpretation of any of the foregoing by the
         Securities and Exchange Commission or other regulatory or judicial
         authority with appropriate jurisdiction, that results in the
         arrangement created by this Agreement being deemed impermissible.

         (c) Upon termination of this Agreement, the Fund shall have no further
liability to ALPS with respect to ALPS's fees or expenses under this Agreement,
except payment of the Fee accrued but unpaid as of the date of termination paid
in a lump sum within sixty (60) days of termination.

         (d) Upon termination of this Agreement, ALPS and the CCO each agrees
that it will cooperate in the smooth transition of Services and to minimize
disruption to the Fund. All payments and expense reimbursements in connection
with the termination of this Agreement are subject to the execution of a general
waiver and release of all known and unknown compensating and reimbursement
claims against the Fund by ALPS and the CCO. Any liability to ALPS or the CCO
with respect to any regulatory action or litigation pertaining to services
rendered by ALPS or the CCO under this Agreement, will survive the termination
of this Agreement.

SECTION 9. BOARD ACTION UNDER THE RULE

         (a) The Board may dismiss a CCO at any time and for any or no reason.
If the Board dismisses the CCO, this Agreement will either end immediately, or,
at the sole discretion of the Board, ALPS shall promptly present another CCO
candidate for Board consideration and approval, which may be given or withheld
for any or no reason, to continue the Services under this Agreement.

         (b) If ALPS wishes to dismiss the CCO under the terms of ALPS's
contract or arrangement with the CCO, then ALPS will make its case to the Board
before taking such action. Under such circumstances, ALPS may, at its own
discretion, offer to present another CCO candidate to the Board that would be
employed by ALPS, provided however, that the Board of the Fund is not obligated
to approve such other proposed CCO candidate to serve as CCO of the Fund and
each Portfolio of the Fund. If the Board (including a majority of the directors
who are not interested persons of the Fund) approves the new CCO, this Agreement
will continue in




effect, as amended to reflect the new CCO. If the Board chooses to engage CCO
who is not an employee of ALPS as a result of ALPS dismissing the CCO under this
Agreement, this Agreement will terminate.

         (c) ALPS covenants that it shall not retaliate against the CCO should
the CCO either (i) inform the Board of a compliance failure or (ii) take
aggressive action to ensure compliance with any rule, regulation or law by the
Fund, a Portfolio or a Service Provider.

         (d) If the Board decides to increase the CCO's compensation or provide
a bonus to the CCO, then either the fees paid to ALPS by the Fund will increase
proportionately or the Fund will separately compensate the CCO for any amounts
it deems due to the CCO above the amounts due to ALPS under this Agreement.

         (e) If the CCO voluntarily resigns, at the discretion of both parties,
ALPS may present an alternative CCO candidate for Board consideration and
approval, which may be given or withheld for any or no reason, to continue the
Services under this Agreement. If the Board chooses to terminate this Agreement
with ALPS as a result of such voluntary resignation by the CCO, ALPS will make
every effort to assist the Board in a smooth transition during this period.

SECTION 10. Representations and Warranties.

         (a) ALPS hereby represents and warrants to the Fund that (a) the
execution, delivery and performance of this Agreement by ALPS does not breach,
violate or cause a default under any agreement, contract or instrument to which
ALPS is a party or any judgment, order or decree to which ALPS is subject; (b)
the execution, delivery and performance of this Agreement by ALPS has been duly
authorized and approved by all necessary action; and (c) upon the execution and
delivery of this Agreement by ALPS and the Fund, this Agreement will be a valid
and binding obligation of ALPS.

         (b) The Fund hereby represents and warrants to ALPS that (a) the
execution, delivery and performance of this Agreement by the Fund does not
breach, violate or cause a default under any agreement, contract or instrument
to which the Fund is a party or any judgment, order or decree to which the Fund
is subject; (b) the execution, delivery and performance of this Agreement by the
Fund has been duly authorized and approved by all necessary action; and (c) upon
the execution and delivery of this Agreement by ALPS and the Fund, this
Agreement will be a valid and binding obligation of the Fund.

SECTION 11. Entire Agreement; Amendment and Waiver.

         This Agreement and the other writings referred to herein contain the
entire agreement between the parties hereto with respect to the subject matter
hereof and thereof and supersede any prior agreement between ALPS and the Fund.
No waiver, amendment or modification of this Agreement shall be valid unless it
is in writing and signed by each party hereto. The waiver by either party of a
breach of any provision of this Agreement by the other party shall not operate
or be construed as a waiver of any subsequent breach by such other party.





SECTION 12. Notices.

         All notices or other communications pursuant to this Agreement shall be
in writing and shall be deemed to be sufficient if delivered personally,
telecopied, sent by nationally-recognized, overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):

         (a) if to the Fund, to:

                  TDAX Funds, Inc.
                  420 Lexington Avenue
                  New York, New York 10170
                  Facsimile:
                  Telephone:

                  with a copy to:
                  Domenick Pugliese
                  Paul, Hastings, Janofsky & Walker LLP
                  75 East 55th Street
                  New York, New York 10022
                  Telephone: (212) 318-6295
                  Facsimile: (212) 230-5107

         (b) if to ALPS, to:

                  ALPS Fund Services, Inc.
                  1290 Broadway, Suite 1100
                  Denver, Colorado  80203
                  Attn:  General Counsel
                  Facsimile:  (303) 623-7850
                  Telephone:  (303) 623-2577

         All such notices and other communications shall be deemed to have been
given and received (a) in the case of personal delivery or delivery by
facsimile, on the date of such delivery if delivered during business hours on a
business day or, if not so delivered, on the next following business day, (b) in
the case of delivery by nationally-recognized, overnight courier, on the
business day following dispatch, and (c) in the case of mailing, on the third
business day following such mailing.

SECTION 13. Headings.

         The section headings in this Agreement are for convenience only and
shall not control or affect the meaning of any provision of this Agreement.



SECTION 14. Severability.





         In the event that any provision of this Agreement is determined to be
partially or wholly invalid, illegal or unenforceable in any jurisdiction, then
such provision shall, as to such jurisdiction, be modified or restricted to the
extent necessary to make such provision valid, binding and enforceable, or if
such provision cannot be modified or restricted, then such provision shall, as
to such jurisdiction, be deemed to be excised from this Agreement; provided,
however, that the binding effect and enforceability of the remaining provisions
of this Agreement, to the extent the economic benefits conferred upon the
parties by virtue of this Agreement remain substantially unimpaired, shall not
be affected or impaired in any manner, and any such invalidity, illegality or
unenforceability with respect to such provisions shall not invalidate or render
unenforceable such provision in any other jurisdiction.

SECTION 15. Remedies.

         (a) Each of the parties hereto acknowledges and understands that
certain provisions of this Agreement are of a special and unique nature, the
loss of which cannot be adequately compensated for in damages by an action at
law, and thus, the breach or threatened breach of such provisions of this
Agreement would cause the non-breaching party irreparable harm. Each of the
parties hereto further acknowledges that, in the event of a breach of Section 5
of this Agreement, the non-breaching party shall be entitled to immediate relief
enjoining such violations in any court or before any judicial body having
jurisdiction over such a claim. All remedies hereunder are cumulative, are in
addition to any other remedies provided for by law or in equity and may, to the
extent permitted by law, be exercised concurrently or separately, and the
exercise of any one remedy shall not be deemed to be an election of such remedy
or to preclude the exercise of any other remedy.

         (b) ALPS shall indemnify and hold the Fund and its employees, the
members of the Board, and each applicable Portfolio and its employees harmless
from and against any and all losses, damages, costs, charges, reasonable
attorneys' fees, payments, expenses and liability, as incurred, arising out of
or attributable to any refusal or failure to comply with the terms of this
Agreement or applicable rules, regulations or laws by ALPS or the CCO, or which
arise out of a lack of good faith, negligence or willful misconduct by ALPS or
the CCO with respect to the performance by ALPS or the CCO under or in
connection with this Agreement or by reason of the reckless disregard by ALPS or
the CCO of its or his obligations and duties under this Agreement.

SECTION 16. Distinction of Portfolios.

         Notwithstanding any other provision of this Agreement, the parties
agree that the assets and liabilities of each Portfolio of the Fund are separate
and distinct from the assets and liabilities of each other Portfolio and that no
Portfolio shall be liable or shall be charged for any debt, obligation or
liability of any other Portfolio, whether arising under this Agreement or
otherwise.



SECTION 17. Benefits of Agreement; Assignment.





         The terms and provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors,
assigns, representatives, heirs and estate, as applicable. This Agreement shall
not be assignable by ALPS without the express written consent of the Fund. Any
purported assignment in violation of the immediately preceding sentence shall be
void and of no effect.

SECTION 18. Survival.

         Anything to the contrary contained in this Agreement notwithstanding,
the provisions of Sections 5 through 7, and 15 through 17 of this Agreement
shall survive the termination of the Term.

SECTION 19. Counterparts and Facsimile Execution.

         This Agreement may be executed in two counterparts, all of which shall
be considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and delivered (by
facsimile or otherwise) to the other party, it being understood that all parties
need not sign the same counterpart. Any counterpart or other signature hereupon
delivered by facsimile shall be deemed for all purposes as constituting good and
valid execution and delivery of this Agreement by the party delivering it.

SECTION 20. Governing Law; Mutual Waiver of Jury Trial; Jurisdiction.

         (a) All questions concerning the construction, interpretation and
validity of this Agreement shall be governed by and construed and enforced in
accordance with the domestic laws of the State of New York without giving effect
to any choice or conflict of law provision or rule (whether in the State of New
York or any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of New York. In furtherance of the
foregoing, the law of the State of New York will control the interpretation and
construction of this Agreement, even if under such jurisdiction's choice of law
or conflict of law analysis, the substantive law of some other jurisdiction
would ordinarily or necessarily apply.

         (b) THE PARTIES IRREVOCABLY AND UNCONDITIONALLY AGREE THAT THE
EXCLUSIVE PLACE OF JURISDICTION FOR ANY ACTION, SUIT OR PROCEEDING ("ACTIONS")
RELATING TO THIS AGREEMENT SHALL BE IN THE COURTS OF THE UNITED STATES OF
AMERICA SITTING IN THE CITY OF NEW YORK, NEW YORK OR, IF SUCH COURTS SHALL NOT
HAVE JURISDICTION OVER THE SUBJECT MATTER THEREOF, IN THE COURTS OF THE STATE OF
NEW YORK SITTING THEREIN, AND EACH SUCH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY AGREES TO SUBMIT TO THE JURISDICTION OF SUCH COURTS FOR PURPOSES
OF ANY SUCH ACTIONS. IF ANY SUCH STATE COURT ALSO DOES NOT HAVE JURISDICTION
OVER THE SUBJECT MATTER THEREOF, THEN SUCH AN ACTION, SUIT OR PROCEEDING MAY BE
BROUGHT IN THE FEDERAL OR STATE COURTS LOCATED IN THE STATES OF THE PRINCIPAL
PLACE OF BUSINESS OF ANY PARTY HERETO. EACH PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY OBJECTION IT MAY HAVE TO THE VENUE OF ANY ACTION
BROUGHT IN SUCH COURTS OR TO THE CONVENIENCE OF THE FORUM. FINAL





JUDGMENT IN ANY SUCH ACTION SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT, A CERTIFIED OR TRUE COPY OF WHICH SHALL
BE CONCLUSIVE EVIDENCE OF THE FACT AND THE AMOUNT OF ANY INDEBTEDNESS OR
LIABILITY OF ANY PARTY THEREIN DESCRIBED.

SECTION 21. Mutual Contribution.

         The parties to this Agreement and their counsel have mutually
contributed to its drafting. Consequently, no provision of this Agreement shall
be construed against any party on the ground that a party drafted the provision
or caused it to be drafted.


         IN WITNESS WHEREOF, each of the undersigned has executed this Chief
Compliance Officer Services Agreement as of the date first above written.



                                TDAX FUNDS, INC.


                                By:  /s/ David W. Jaffin
                                     ---------------------------------
                                     Name:  David W. Jaffin
                                     Title: Chief Financial Officer


                                ALPS FUND SERVICES, INC.


                                By:  /s/ Thomas A. Carter
                                     ---------------------------------
                                     Name:  Thomas A. Carter
                                     Title: Chief Financial Officer





                                    Exhibit A
                                    ---------

                       Duties of Chief Compliance Officer

The Services shall include, but not be limited to, the following. Unless
otherwise stated, terms used in this Exhibit A shall have the meanings assigned
thereto in the Chief Compliance Officer Services Agreement to which this Exhibit
A is attached and into which this Exhibit A is incorporated by reference.

I.       Drafting of Compliance Program. No later than _____________, 2007, the
         CCO shall, with the assistance of the Fund, draft written compliance
         policies and procedures (the "Compliance Program") of the Fund, which
         shall address compliance with, and be reasonably designed to prevent
         violation of, "Federal Securities Laws"(2) and the Uniting and
         Strengthening America by Providing Appropriate Tools Required to
         Intercept and Obstruct Terrorism Act of 2001 ("U.S.A. Patriot Act")
         (for the purposes of this Exhibit A, "Federal Securities Laws" shall be
         include the U.S.A. Patriot Act together with the "Federal Securities
         Laws" referred to in the Rule). In addition to provisions of Federal
         Securities Laws that apply to the Fund, the Compliance Program shall
         address compliance with, and be reasonably designed to prevent
         violation of, the Fund's charter and by-laws and all exemptive orders,
         no-action letters and other regulatory relief received by the Fund from
         the Securities and Exchange Commission (the "SEC") and NASD, Inc. (the
         "NASD") (all such items collectively, "Regulatory Relief"); provided,
         however, that the Compliance Program shall address only that Regulatory
         Relief afforded the Service Providers or the Fund or relevant to
         compliance by the Service Providers or the Fund, and shall not address
         the terms by which other parties may receive the benefits of any
         Regulatory Relief. In drafting the Compliance Program, the CCO shall
         engage in the following activities:

         A.       Evaluation of Internal Control Structure.

                  1.       Conduct interviews with certain employees throughout
                           the business lines of the Fund that are responsible
                           for the day-to-day operations of the Fund in relation
                           to compliance by the Fund and its Service Providers
                           (defined below) with the Federal Securities Laws.

                  2.       Assess from such interviews the operational risks and
                           compliance with stated policies and procedures of the
                           Fund and its Service Providers.

                  3.       Review internal audit and other reports maintained by
                           the Fund, and to the extent practicable, its Service
                           Providers, related to compliance with the Federal
                           Securities Laws.

___________________________________
(2)      "Federal Securities Laws" are defined by the Rule as the Securities Act
         of 1933, the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of
         2002, the Investment Company Act of 1940, the Investment Advisers Act
         of 1940, Title V of the Gramm-Leach-Bliley Act, any SEC rules adopted
         under any of the foregoing laws, the Bank Secrecy Act, as it applies to
         registered investment companies, and any rules adopted thereunder by
         the SEC or the Department of Treasury.





                  4.       Review any written policies and procedures to assess
                           the adequacy of such policies and procedures with
                           respect to compliance with the Federal Securities
                           Laws by the Fund and its Service Providers.

         B.       Policies and Procedures of the Fund. Conduct a detailed review
                  of the Fund's Compliance Program pertaining to compliance by
                  registered investment companies with the Federal Securities
                  Laws, among other things:

                  1.       Pricing of portfolio securities and Portfolio shares,
                           with a focus on the following items within the
                           pricing polices and procedures:

                           (a)      monitoring for circumstances that may
                                    necessitate the use of fair value prices;

                           (b)      establishing criteria for determining when
                                    market quotations are no longer reliable for
                                    a particular portfolio security;

                           (c)      providing a methodology or methodologies by
                                    which the Portfolios determine the current
                                    fair value of their portfolio securities;
                                    and

                           (d)      reviewing the appropriateness and accuracy
                                    of the methodology used in valuing
                                    securities, including making any necessary
                                    adjustments.

                  2.       Processing of Portfolio shares, with a focus on the
                           following items:

                           (a)      segregation of investor orders received
                                    before the Portfolios price their shares
                                    from those that were received after the
                                    Portfolios price their shares; and

                           (b)      methodology used by the Portfolios to
                                    protect themselves and their shareholders
                                    against late trading.

                  3.       Identification of affiliated persons to ensure that
                           any transactions with affiliated persons are executed
                           in compliance with the 1940 Act.

                  4.       Protection of nonpublic information, including:

                           (a)      prohibitions against trading portfolio
                                    securities on the basis of information
                                    acquired by analysts or portfolio managers
                                    employed by the Fund or the Portfolios'
                                    investment adviser ("Adviser") or the
                                    Portfolio's investment subadviser
                                    ("Subadviser") ;

                           (b)      disclosure to third parties of material
                                    information about the Portfolios' holdings,
                                    trading strategies or pending transactions;
                                    and




                           (c)      purchase or sale of Portfolio shares by the
                                    personnel of the Fund or the Adviser or
                                    Subadviser based on material, nonpublic
                                    information about the Portfolios.

                  5.       Compliance with Portfolio governance requirements,
                           including the procedures to guard against:

                           (a)      an improperly constituted Board of
                                    Directors;

                           (b)      failure of the Board of Directors to
                                    properly consider matters entrusted to it;
                                    and

                           (c)      failure of the Board of Directors to request
                                    and consider information required by the
                                    1940 Act from the Fund and other Service
                                    Providers.

                  6.       The excessive short-term trading of mutual fund
                           shares that may be harmful to the Portfolios,
                           including a focus on the following areas:

                           (a)      consistency of policies and procedures with
                                    the Portfolios' disclosed policies regarding
                                    market timing;

                           (b)      monitoring of shareholder trades or flows of
                                    money in and out of the Portfolios in order
                                    to detect market timing activity;

                           (c)      enforcement of the Portfolios' policies
                                    regarding market timing;

                           (d)      prevention of waivers that would harm the
                                    Portfolios or their shareholders, or
                                    subordinate the interests of the Portfolios
                                    or their shareholders to those of the Fund
                                    or any other affiliated person or associated
                                    person of the Fund; and

                           (e)      reporting to the Fund's Board regarding all
                                    waivers granted, so that the Board can
                                    determine whether such waivers were proper.

                  7.       The distribution, marketing and advertising of the
                           Portfolios' shares.

                  8.       The trading of securities by the Portfolios,
                           including a focus on enforcement of the Fund's
                           policies with respect to brokerage, soft dollars and
                           allocation of trades.

                  9.       The review of any electronic mail communications.

II.      Administration of Compliance Program. The CCO shall administer and
         enforce the Fund's Compliance Program.

III.     Oversight of Service Providers. The CCO is responsible for overseeing,
         on behalf of the Fund, adherence to the written compliance policies and
         procedures of the Fund's service




providers, including the Fund's investment adviser, X Shares Advisors LLC (the
"Investment Adviser"), the Fund's administrator, transfer agent and investment
subadviser, and the Fund's distributor, ALPS Distributors, Inc. (the
"Distributor"), (for purposes of this Exhibit A, the Investment Adviser, the
Investment Subadviser and the Distributor, collectively, the "Service
Providers"). In furtherance of this duty,

A.       No later than __________, 2007, the CCO shall obtain and review the
         written compliance policies and procedures of the Service Providers or
         summaries of such policies that have been drafted by someone familiar
         with them.

B.       The CCO shall monitor the Service Providers' compliance with their own
         written compliance policies and procedures, Federal Securities Laws and
         the Fund's charter, by-laws and Regulatory Relief. In so doing, the CCO
         shall interact with representatives of the Service Providers as
         appropriate. Where deemed appropriate and in accordance with
         pronouncements by the Staff of the SEC, ALPS may rely on summaries that
         are prepared by a Service Provider or a third party, instead of the
         actual policies and procedures of the Service Provider.

C.       The CCO shall attempt to obtain the following representations from each
         Service Provider and, if it fails to obtain such representations, shall
         report this fact to the Fund:

         1.       In connection with the documentation of its written policies
                  and procedures governing the provision of its services to the
                  relevant Fund, the Service Provider has prepared and delivered
                  to the Fund a summary of core services that it provides to the
                  Fund or, if no such summary is available, that it has
                  delivered to the Fund copies of the relevant policies and
                  procedures.

         2.       The Service Provider will provide to the Fund and the CCO any
                  revisions to its written compliance policies and procedures on
                  at least an annual basis, or more frequently in the event of a
                  material revision.

         3.       The Service Provider's written compliance policies and
                  procedures have been reasonably designed to prevent, detect
                  and correct violations of the applicable Federal Securities
                  Laws and critical functions related to the services performed
                  by Service Provider pursuant to the applicable agreement
                  between the Service Provider and the Fund.

         4.       The Service Provider has established monitoring procedures,
                  and shall review, no less frequently than annually, the
                  adequacy and effectiveness of its written compliance policies
                  and procedures to check that they are reasonably designed to
                  prevent, detect and correct violations of those applicable
                  Federal Securities Laws and critical functions related to the
                  services performed by the Service Provider pursuant to the
                  applicable agreement between the Service Provider and the
                  Fund.





IV.      Annual Review. The CCO will monitor the Fund's Compliance Program for
         effectiveness, including ongoing dialogue with key compliance personnel
         at the Fund's Service Providers. Such monitoring will include
         risk-based compliance testing of the Fund's Compliance Program. The
         Rule requires that, at least annually, the Fund review its Compliance
         Program and that of its Service Providers and the effectiveness of
         their respective implementations (the "Annual Review"). The CCO shall
         perform the Annual Review for the Fund. The first Annual Review shall
         be completed no later than [July 24, 2008].

V.       Reports to the Fund; Escalation

         A.       The CCO shall make quarterly reports to the Fund regarding its
                  administration and enforcement of the Compliance Program.
                  These regular reports shall address compliance by the Fund and
                  the Service Providers and such other matters as the Fund may
                  reasonably request.

         B.       In addition, at least annually, the CCO shall submit a written
                  report to the Board addressing the following issues:

                  1.       the operation of the Compliance Program, and the
                           written compliance policies and procedures of the
                           Service Providers;

                  2.       any material changes made to the Compliance Program
                           and the written compliance policies and procedures of
                           the Service Providers since the date of the such last
                           report;

                  3.       any material changes to the Compliance Program and
                           the written compliance policies and procedures of the
                           Service Providers recommended as a result of the
                           Annual Review; and

                  4.       each "Material Compliance Matter" that occurred since
                           the date of the last report.(3)

                  This written report shall be based on the Annual Review. The
                  first written report shall be presented to the Fund no later
                  than sixty (60) days after the date of the first Annual
                  Review.


___________________________________
(3)      "Material Compliance Matter" is defined as "any compliance matter about
         which the Fund's board would reasonably need to know to oversee fund
         compliance," which involves any of the following (without limitation):
         (i) a violation of Federal Securities Laws by the Fund or a Service
         Provider (or an officer, director, employee or agent of such Service
         Provider; (ii) a violation of the Compliance Program of the Fund, or
         the written compliance policies and procedures of its Service
         Providers; or (iii) a weakness in the design or implementation of the
         Compliance Program policies and procedures of the Fund, or the written
         compliance policies and procedures of its Service Providers.





         C.       In the event that the CCO reports a Material Compliance Matter
                  and is not reasonably satisfied with the Fund's efforts to
                  address and remedy the same, the CCO shall report such
                  Material Compliance Matter to the Board.

         D.       At least annually, the CCO shall meet separately with the
                  Board's directors who are not interested persons of the Fund.

VI.      Recordkeeping. The CCO shall maintain the books and records for the
         Fund that are required to be retained by the Rule, which books and
         records may be maintained electronically but which shall, in any event,
         be backed-up and safeguarded in accordance with ALPS's regular
         practices for record retention.

VII.     Meeting with Regulators. The CCO shall meet with, and reply to
         inquiries from, the SEC, the NASD and other legal and regulatory
         authorities with responsibility for administering Federal Securities
         Laws as necessary or as reasonably requested by the Board.

VIII.    Amendments to the Compliance Program. The CCO shall consult with the
         Board and its representatives as necessary to amend, update and revise
         the Compliance Program as necessary, but no less frequently than
         annually. Additionally, the CCO will recommend amendments and draft
         policies and procedures as they pertain to:

         A.       consistency with regulatory expectations of risk-based
                  policies and procedures;

         B.       maintenance of compliance with the Federal Securities Laws;
                  and

         C.       consistency within the structure, organization and format of
                  the policies and procedures.

         Any amendments to the Fund's policies and procedures will be based on
         industry best practices and regulatory expectations. In addition, on a
         quarterly basis, the CCO, in consultation with the Fund's counsel, will
         provide the Fund with updates, if any, to the Fund's policies and
         procedures to reflect changing regulatory requirements.






                                    Exhibit B
                                    ---------



See attached








                                    Exhibit C
                                    ---------

                          Portfolio Series of the Fund
                              (as of July 24, 2007)



         TDAX Independence 2010 Exchange-Traded Fund
         TDAX Independence 2020 Exchange-Traded Fund
         TDAX Independence 2030 Exchange-Traded Fund
         TDAX Independence 2040 Exchange-Traded Fund
         TDAX Independence In-Target Exchange-Traded Fund






                                                                  Exhibit (h)(5)


                             PARTICIPATION AGREEMENT

         THIS AGREEMENT, dated as of ____________________, 2007, between
______________________________, a [business trust /corporation] organized under
the laws of the [Commonwealth/State] of _______________________________________,
on behalf of itself or its separate series listed on Schedule A, severally and
not jointly (each, a "Fund of Funds"), and XShares Advisors LLC, a limited
liability company organized under the laws of the State of Maryland, and each
exchange traded fund that is advised or sponsored by XShares Advisors LLC listed
on Schedule B, each on behalf of itself or its respective series, severally and
not jointly (each an "XShares Fund" and collectively the "XShares Funds").

         WHEREAS, the Fund of Funds and the XShares Funds each are registered
with the U.S. Securities and Exchange Commission ("SEC") as open-end management
investment companies under the Investment Company Act of 1940 (the "1940 Act");

         WHEREAS, section 12(d)(l)(A) and (B) of the 1940 Act limits the ability
of an investment company to invest in shares of another investment company, and
therefore limits the ability of a Fund of Funds to invest in shares of an
XShares Fund;

         WHEREAS, XShares Advisors LLC and HealthShares(TM), Inc., on behalf of
each Fund, have obtained an order from the SEC dated June 21, 2007 (the "XShares
Order"), that permits registered investment companies to invest in the XShares
Funds in excess of the limits set forth in section 12(d)(1)(A) and (B) in
accordance with the conditions of the XShares Order and the representations in
the application filed to obtain such Order (the "XShares Application"); and

         WHEREAS, the Fund of Funds may, from time to time, invest in shares of
one or more XShares Funds in excess of the limitations of section 12(d)(1)(A)
and (B) in reliance on the XShares Order;

         NOW THEREFORE, in consideration of the potential benefits to the Fund
of Funds and the XShares Funds arising out of the Fund of Funds' investment in
XShares Funds, the parties agree as follows.

         1.       Representations and Obligations of the XShares Funds.

                  (a) The XShares Funds have provided to the Fund of Funds a
                  copy of the Order and the related SEC Notice of Application
                  for such Order (attached hereto as Schedule C). The XShares
                  Funds will promptly provide the Fund of Funds with (i) a copy
                  of any amendments to the XShares Order, and (ii) a copy of the
                  XShares Application upon request.

                  (b) In connection with any investment by a Fund of Funds in an
                  XShares Fund, the XShares Fund agrees (i) to comply with the
                  terms and conditions of the XShares Order and this Agreement,
                  and (ii) to promptly notify the Fund of Funds if such XShares
                  Fund fails to comply with the terms and conditions of the
                  XShares Order or this Agreement.




                  (c) Each registered trademark indicated in the name of the
                  XShares Fund(s) on Schedule B is a registered trademark of
                  XShares Advisors LLC, which has licensed the trademark to the
                  respective XShares Fund.

         2.       Representations and Obligations of the Investing Funds.

                  (a) Pursuant to Condition 8 of the XShares Order, each Fund of
                  Funds represents that the board of directors/trustees of the
                  Fund of Funds and the Fund of Funds' advisor understand the
                  terms and conditions of the XShares Order and that each agrees
                  to fulfill its responsibilities under the XShares Order.

                  (b) Pursuant to Condition 8 of the XShares Order, each Fund of
                  Funds will promptly notify the XShares Funds in writing at the
                  time of any investment by such Fund in an XShares Fund in
                  excess of the 3% limit in Section 12(d)(1)(A)(i). Upon such
                  investment, each Fund of Funds shall also provide to the
                  XShares Funds in writing a list of the names of each Fund of
                  Funds Affiliate and Underwriting Affiliate (as such terms are
                  defined in the Order) and shall promptly notify the XShares
                  Funds of any changes to such list.

                  (c) Each Fund of Funds will promptly notify the XShares Funds
                  in writing of any purchase or acquisition of shares of an
                  XShares Fund that causes such Fund of Funds to hold (i) 5% or
                  more of such XShares Fund's total outstanding voting
                  securities, and (ii) 10% or more of such XShares Fund's total
                  outstanding voting securities.

                  (d) To the extent a Fund of Funds holds 25% or more of the
                  total outstanding voting securities of an XShares Fund, the
                  Fund of Funds agrees to vote its shares in the same proportion
                  as the vote of all other holders of shares of such XShares
                  Fund.

                  (e) If a Fund of Funds exceeds the 5% or 10% limitation in
                  Section 12(d)(l)(A)(ii) or (iii), the Fund of Funds, as
                  required by the XShares Application, will disclose in its
                  prospectus in "Plain English":

                  (1)      That it may invest in exchange-traded funds; and

                  (2)      The unique characteristics of the Fund of Funds
                           investing in exchange-traded funds, including but not
                           limited to, the expense structure and any additional
                           expenses of investing in exchange-traded funds.

                  (f) Each Fund of Funds: (i) acknowledges that it has received
                  a copy of the XShares Order and the related SEC Notice of
                  Application for such Order; (ii) agrees to adhere to the terms
                  and conditions of the XShares Order and this Agreement and to
                  participate in the proposed transactions in a manner that
                  addresses the concerns underlying the XShares Order; (iii)
                  represents that investments in the XShares Funds will be
                  accomplished in compliance with its investment restrictions
                  and will be consistent with the investment policies set forth
                  in its registration statement; (iv) acknowledges that it may
                  rely on the



                                       2



                  XShares Order only to invest in XShares Funds and not in any
                  other registered investment company; and (v) agrees to
                  promptly notify the XShares Funds if it fails to comply with
                  the XShares Order or this Agreement.

         3.       Indemnification.

                  Each Fund of Funds agrees to hold harmless and indemnify the
                  XShares Funds, including any principals, directors or
                  trustees, officers, employees and agents, against and from any
                  and all losses, expenses or liabilities incurred by or claims
                  or actions ("Claims") asserted against the XShares Funds,
                  including any principals, directors or trustees, officers,
                  employees and agents, to the extent such Claims result from
                  (i) a violation or alleged violation by the Fund of Funds of
                  any provision of this Agreement or (ii) a violation or alleged
                  violation by the Fund of Funds of the terms and conditions of
                  the XShares Order, such indemnification to include any
                  reasonable counsel fees and expenses incurred in connection
                  with investigating and/or defending such Claims.

                  The XShares Funds agree to hold harmless and indemnify a Fund
                  of Funds, including any directors or trustees, officers,
                  employees and agents, against and from any Claims asserted
                  against the Fund of Funds, including any directors or
                  trustees, officers, employees and agents, to the extent such
                  Claims result from (i) a violation or alleged violation by the
                  XShares Fund of any provision of this Agreement or (ii) a
                  violation or alleged violation by the XShares Fund of the
                  terms and conditions of the XShares Order, such
                  indemnification to include any reasonable counsel fees and
                  expenses incurred in connection with investigating and/or
                  defending such Claims; provided, however, that the XShares
                  Fund shall not be liable for indemnifying any Fund of Funds
                  for any Claims resulting from violations that occur as a
                  result of incomplete or inaccurate information provided by the
                  Fund of Funds to the XShares Fund pursuant to terms and
                  conditions of the Order or this Agreement.

         4.       Web Sites.

                  For purposes of determining whether the Fund of Funds has
                  exceeded the investment thresholds in XShares Funds for
                  purposes of Section 2(b), (c), (d), and (e) of this Agreement,
                  the Fund of Funds may use the information contained on the
                  particular XShares Funds' public Internet web site regarding
                  such XShares Fund's total outstanding shares, however, any
                  such use shall be subject to the terms and conditions of such
                  web site. The XShares Fund's web sites are listed on Schedule
                  C hereto.

         5.       Materials.

                  To the extent a Fund of Funds refers to one or more XShares
                  Funds in any prospectus, statement of additional information
                  or otherwise, each Fund of Funds agrees to:



                                       3



                  (a) For those XShares Funds included on Schedule B with names
                  that are registered trademarks, (i) include the trademark
                  symbol in all references to the XShares Fund or series thereof
                  (for example, the "HealthSharesTM [Index] Fund"); (ii) include
                  the following notice within reasonable proximity to the
                  reference to the XShares Fund or series thereof:

                  [Name of XShares Fund]TM is a registered trademark of XShares
                  Advisors LLC.

                  (b) For all XShares Funds, include the following notice within
                  reasonable proximity to the reference to the XShares Fund:

                  Neither XShares Advisors LLC nor the [Name of XShares Fund]
                  Funds make any representations regarding the advisability of
                  investing in [Name of Fund of Funds].

         6.       Notices.

                  All notices, including all information that either party is
                  required to provide under the terms of this Agreement and the
                  terms and conditions of the XShares Order, shall be in writing
                  and shall be delivered by registered or overnight mail,
                  facsimile, or electronic mail to the address for each party
                  specified below (which address may be changed from time to
                  time by written notice to the other party).

                  If to the Fund of Funds:

                           [Name]
                           c/o [Company]
                           [Address]
                           [City, State, ZIP]
                           Fax:
                           Email:

                  If to the XShares Funds:

                           Anthony F. Dudzinski
                           XShares Advisors LLC
                           420 Lexington Avenue, Suite 2550
                           New York, NY 10170
                           Fax: [   ]
                           Email: adudzinski@XSharesadvisors.com

                  With a copy to:

                           Richard Berenger
                           XShares Advisors LLC
                           420 Lexington Avenue, Suite 2550
                           New York, NY 10170
                           Fax: [ ]


                                       4



                           Email: rberenger@XSharesadvisors.com

                           Domenick Pugliese
                           Paul, Hastings, Janofsky & Walker LLP
                           Park Avenue Tower
                           75 East 55th Street
                           New York, NY 10022
                           Fax: (212) 230-7745
                           Email: domenickpugliese@paulhastings.com

         7.       Termination; Governing Law.

                  (a) This Agreement will continue until terminated in writing
                  by either party upon sixty (60) days' notice to the other
                  party, provided, however, that the obligation of a Fund of
                  Funds in Section 2(d) above shall survive the termination of
                  this Agreement. This Agreement may not be assigned by either
                  party without the prior written consent of the other.

                  (b) This Agreement will be governed by New York law without
                  regard to choice of law principles.

                  (c) In any action involving the XShares Funds under this
                  Agreement, each Fund of Funds agrees to look solely to the
                  individual XShares Fund(s) listed on Schedule B that is/are
                  involved in the matter in controversy and not to any other
                  series of XShares Advisors LLC.



                                       5




         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

Each of the Fund of Funds listed on Schedule A, severally and not jointly, on
behalf of itself or each of its series


_______________________________________
Name:
Title:


XSHARES FUNDS, on
behalf of each of its series

_______________________________________
Name: Anthony F. Dudzinski
Title: Chief Executive Officer and President

XSHARES ADVISORS LLC, on
behalf of each of its series

_______________________________________
Name: Anthony F. Dudzinski
Title: President of XShares Group LLC,
       the sole managing member




                                       6



                                                                      SCHEDULE A

                              List of Fund of Funds







                                                                      SCHEDULE B

                              List of XShares Funds

XShares Fund                       Sub-Adviser                Distributor
------------                       -----------                -----------

HealthSharesTM, Inc.

TDAX Funds, Inc.

StateSharesTM, Inc.







                                                                      SCHEDULE C
                         List of XShares Funds' Websites






                                                                  Exhibit (h)(6)


                                TDAX FUNDS, INC.

                     OPERATING EXPENSES LIMITATION AGREEMENT

            THIS OPERATING EXPENSES LIMITATION AGREEMENT (the "Agreement") is
effective as of the 24th day of July, 2007, by and between TDAX Funds, Inc., a
Maryland corporation (the "Company"), on behalf of each of the funds listed on
Appendix A (each a "Fund," and collectively, the "Funds"), XShares Advisors LLC
(the "Advisor"), and Amerivest Investment Management, LLC (the "Sub-Advisor").

                                   WITNESSETH:

            WHEREAS, the Advisor renders advice and services to the Funds
pursuant to the terms and provisions of an Investment Advisory Agreement between
the Company and the Advisor dated as of the 24th day of July, 2007 (the
"Investment Advisory Agreement"); and

            WHEREAS, the Company's Board of Directors and the Advisor have
retained the Sub-Advisor to render investment advisory and other services
pursuant to the terms and provisions of a Sub-Advisory Agreement between the
Advisor and the Sub-Advisor dated as of the 24th day of July, 2007 (the
"Sub-Advisory Agreement"); and

            WHEREAS, Sub-Advisor desires to limit each Fund's Operating Expenses
(as that term is defined in paragraph 2 of this Agreement) pursuant to the terms
and provisions of this Agreement, and the Company (on behalf of each Fund)
desires to allow the Sub-Advisor to implement those limits;

            NOW THEREFORE, in consideration of the covenants and the mutual
promises hereinafter set forth, the parties, intending to be legally bound
hereby, mutually agree as follows:

            1. LIMIT ON OPERATING EXPENSES. The Sub-Advisor hereby agrees to
limit each Fund's current Operating Expenses to an annual rate, expressed as a
percentage of each Fund's respective average annual net assets to the amounts
listed in Appendix A (the "Annual Limits"). In the event that the current
Operating Expenses of a Fund, as accrued each month, exceed its Annual Limit,
the Sub-Advisor will pay to the Fund, on a monthly basis, the excess expense
within a reasonable time after being notified that an excess expense payment is
due.

            2. DEFINITION. For purposes of this Agreement, the term "Operating
Expenses" with respect to each Fund, is defined to include all expenses
necessary or appropriate for the operation of each Fund, including the Advisor's
investment advisory or management fee detailed in the Investment Advisory
Agreement and other expenses described in the Investment Advisory Agreement, but
does not include any front-end or contingent deferred loads, acquired fund fees
and expenses, taxes, leverage interest,





                                                                  Exhibit (h)(6)


brokerage commissions, expenses incurred in connection with any merger or
reorganization, or extraordinary expenses such as litigation.

            3. REIMBURSEMENT OF FEES AND EXPENSES. The Sub-Advisor retains its
right to receive reimbursement of any excess expense payments paid by it
pursuant to this Agreement made in the prior three fiscal years, to the extent
that such reimbursement would not exceed the Fund's Annual Limit, if applicable,
for such fiscal year.

            4. TERM. This Agreement shall become effective on the date specified
herein and shall remain in effect indefinitely, unless sooner terminated as
provided in Paragraph 5 of this Agreement.

            5. TERMINATION. This Agreement may be terminated at any time, and
without payment of any penalty, by the Board of Directors of the Company (the
"Board"), on behalf of each Fund, upon sixty (60) days' written notice to the
Sub-Advisor. The Sub-Advisor agrees and intends that this commitment will renew
automatically on the first day of each October for a 12 month term unless the
Sub-Advisor provides the Board of Directors with notice of termination of this
commitment prior to the expiration of its then current term. This Agreement will
automatically terminate if the Investment Advisory Agreement or Sub-Advisory
Agreement are terminated, with such termination effective upon the effective
date of the Investment Advisory Agreement's or Sub-Advisory Agreement's
termination.

            6. IMPACT OF BREACH. In the event Sub-Advisor fails to make excess
expense payments in accordance with Section 1 of this Agreement, the Advisor
shall pay such excess expense payments from its own resources and shall deduct
such excess expense payments from the Sub-Advisor's fee, as necessary.

            7. ASSIGNMENT. This Agreement and all rights and obligations
hereunder may not be assigned without the written consent of the other party.

            8. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute or rule, or shall be otherwise
rendered invalid, the remainder of this Agreement shall not be affected thereby.

            9. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Maryland without giving effect to
the conflict of laws principles thereof; provided that nothing herein shall be
construed to preempt, or to be inconsistent with, any federal law, regulation or
rule, including the Investment Company Act of 1940, and the Investment Advisers
Act of 1940, and any rules and regulation promulgated thereunder.


                           [SIGNATURE PAGE TO FOLLOW]





                                                                  Exhibit (h)(6)


            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested by their duly authorized officers, all on the day
and year first above written.


TDAX FUNDS, INC.                                        XSHARES ADVISORS LLC
on behalf of
each of the Funds listed on Appendix A

By:   /s/ David M. Kelley                        By:    /s/ David W. Jaffin
      -------------------------------                   ------------------------
Name: David M. Kelley                            Name:  David W. Jaffin
      -------------------------------                   ------------------------
Title: President                                 Title: Chief Financial Officer
       ------------------------------                   ------------------------


AMERIVEST INVESTMENT MANAGEMENT, LLC

By:  /s/ William J. Vulpis
     -------------------------------

Name: William J. Vulpis
     -------------------------------
Title:   President






                                                                  Exhibit (h)(6)


                                   APPENDIX A


Fund                                                    Operating Expense Limit
----                                                    -----------------------

TDAX Independence 2010 Exchange-Traded Fund             .65%

TDAX Independence 2020 Exchange-Traded Fund             .65%

TDAX Independence 2030 Exchange-Traded Fund             .65%

TDAX Independence 2040 Exchange-Traded Fund             .65%

TDAX Independence In-Target Exchange-Traded Fund        .65%



                                                                  Exhibit (i)(1)

             [Letterhead of Paul, Hastings, Janofsky & Walker LLP]]


August 17, 2007


TDAX Funds, Inc.
420 Lexington Avenue, Suite 2550
New York, New York 10170

Ladies and Gentlemen:

We have acted as counsel to TDAX Funds, Inc., a Maryland corporation (the
"Company"), in connection with the Company's Registration Statement filed on
Form N-1A with the Securities and Exchange Commission (the "Registration
Statement") relating to the issuance by the Company of shares of common stock
(the "Shares") of the following series of the Company: TDAX Independence 2010
Exchange-Traded Fund, TDAX Independence 2020 Exchange-Traded Fund, TDAX
Independence 2030 Exchange-Traded Fund, TDAX Independence 2040 Exchange-Traded
Fund and TDAX Independence In-Target Exchange-Traded Fund (each a "Fund," and
collectively, the "Funds").

In connection with this opinion, we have assumed the authenticity of all
records, documents and instruments submitted to us as originals, the genuineness
of all signatures, the legal capacity of natural persons and the conformity to
the originals of all records, documents and instruments submitted to us as
copies.

We have based our opinion upon our review of the following records, documents
and instruments:

     (a)   the Company's Articles of Amendment and Restatement (the "Charter"),
           certified as of a recent date by the State Department of Assessments
           and Taxation of Maryland;

     (b)   the Amended and Restated Bylaws of the Company, certified to us by an
           officer of the Company as being true and complete on the date hereof;

     (c)   resolutions of the Company's Board of Directors adopted on July 24,
           2007 authorizing the establishment of each of the Funds and the
           issuance of the Shares, certified to us by an officer of the Company
           as being true and complete and in effect on the date hereof; and

     (d)   the Registration Statement.

We have relied without independent investigation upon the opinion dated the date
hereof of Venable LLP, delivered to the Company with respect to the questions of
law of the





TDAX Funds, Inc.
August 17, 2007
Page 2


State of Maryland. We are not admitted to the practice of law in any
jurisdiction but the State of New York and we do not hold ourselves out as
experts in or express any opinion as to the laws of other states or
jurisdictions except as to matters of federal law. Based on the foregoing and
our examination of such questions of law as we have deemed necessary and
appropriate for the purpose of this opinion, and assuming that (i) all of the
Shares will be issued and sold for consideration at their net asset value on the
date of their issuance in accordance with statements in the Registration
Statement and in accordance with the Charter, (ii) all consideration for the
Shares will be actually received by the Company, and (iii) all applicable
securities laws will be complied with, then it is our opinion that, when issued
and sold by the Company, the Shares will be legally issued, fully paid and
nonassessable by the Company.

This opinion is rendered to you in connection with the Registration Statement
and is solely for your benefit. This opinion may not be relied upon by you for
any other purpose or relied upon by any other person, firm, corporation or other
entity for any purpose, without out prior written consent. We disclaim any
obligation to advise you of any developments in areas covered by this opinion
that occur after the date of this opinion.

We hereby consent to (i) the reference of our firm as Legal Counsel in the
Registration Statement and (ii) the filing of this opinion as an exhibit to the
Registration Statement.




Very truly yours,

/s/ PAUL, HASTINGS, JANOFSKY & WALKER LLP
-----------------------------------------
PAUL, HASTINGS, JANOFSKY & WALKER LLP




                                                                  Exhibit (i)(2)

                           [LETTERHEAD OF VENABLE LLP]






                                 August 17, 2007

TDAX Funds, Inc.
420 Lexington Avenue,
Suite 2550
New York, New York 10170

               Re:    Registration Statement on Form N-1A:
                      1933 Act File No.:  333-139872
                      1940 Act File No.:  811-22001

Ladies and Gentlemen:

               We have served as Maryland counsel to TDAX Funds, Inc., a
Maryland corporation registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end management investment company (the
"Company"), in connection with certain matters of Maryland law arising out of
the registration and issuance of an indefinite number of shares of common stock,
$.0001 par value per share (the "Common Stock"), of the Company in the following
series (collectively, the "Shares"): (a) TDAX Independence 2010 Exchange-Traded
Fund; (b) TDAX Independence 2020 Exchange-Traded Fund; (c) TDAX Independence
2030 Exchange-Traded Fund; (d) TDAX Independence 2040 Exchange-Traded Fund; and
(e) TDAX Independence In-Target Exchange-Traded Fund, covered by the
above-referenced Registration Statement, and all amendments thereto (the
"Registration Statement"), filed by the Company with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"1933 Act"), and the 1940 Act.

               In connection with our representation of the Company, and as a
basis for the opinion hereinafter set forth, we have examined originals, or
copies certified or otherwise identified to our satisfaction, of the following
documents (hereinafter collectively referred to as the "Documents"):

               1. The Registration Statement, substantially in the form
transmitted to the Commission under the 1933 Act and 1940 Act;

               2. The charter of the Company (the "Charter"), certified as of a
recent date by the State Department of Assessments and Taxation of Maryland (the
"SDAT");

               3. The Bylaws of the Company, certified as of the date hereof by
an officer of the Company;





TDAX Funds, Inc.
August 17, 2007
Page 2


               4.  A certificate of the SDAT as to the good standing of the
Company, dated as of a recent date;

               5. Resolutions adopted by the Board of Directors of the Company
(the "Resolutions") relating to the authorization of the sale and issuance of
the Shares at net asset value in a continuous public offering, certified as of
the date hereof by an officer of the Company;

               6. A certificate executed by an officer of the Company, dated as
of the date hereof; and

               7. Such other documents and matters as we have deemed necessary
or appropriate to express the opinion set forth below, subject to the
assumptions, limitations and qualifications stated herein.

               In expressing the opinion set forth below, we have assumed the
following:

               1. Each individual executing any of the Documents, whether on
behalf of such individual or any other person, is legally competent to do so.

               2. Each individual executing any of the Documents on behalf of a
party (other than the Company) is duly authorized to do so.

               3. Each of the parties (other than the Company) executing any of
the Documents has duly and validly executed and delivered each of the Documents
to which such party is a signatory, and such party's obligations set forth
therein are legal, valid and binding and are enforceable in accordance with all
stated terms.

               4. All Documents submitted to us as originals are authentic. The
form and content of all Documents submitted to us as unexecuted drafts do not
differ in any respect relevant to this opinion from the form and content of such
Documents as executed and delivered. All Documents submitted to us as certified
or photostatic copies conform to the original documents. All signatures on all
such Documents are genuine. All public records reviewed or relied upon by us or
on our behalf are true and complete. All representations, warranties, statements
and information contained in the Documents are true and complete. There has been
no oral or written modification of or amendment to any of the Documents, and
there has been no





TDAX Funds, Inc.
August 17, 2007
Page 3


waiver of any provision of any of the Documents, by action or omission of the
parties or otherwise.

               5. Upon any issuance of the Shares, the total number of shares of
each series of Common Stock issued and outstanding will not exceed the total
number of shares of Common Stock of such series that the Company is then
authorized to issue under the Charter.

               Based upon the foregoing, and subject to the assumptions,
limitations and qualifications stated herein, it is our opinion that:

               1. The Company is a corporation duly incorporated and existing
under and by virtue of the laws of the State of Maryland and is in good standing
with the SDAT.

               2. The issuance of the Shares has been duly authorized and, when
and if issued and delivered against payment of net asset value therefor in
accordance with the Resolutions and the Registration Statement, the Shares will
be validly issued, fully paid and nonassessable.

               The foregoing opinion is limited to the substantive laws of the
State of Maryland and we do not express any opinion herein concerning any other
law. We express no opinion as to compliance with federal or state securities
laws, including the securities laws of the State of Maryland, or the 1940 Act.

               The opinion expressed herein is limited to the matters
specifically set forth herein and no other opinion shall be inferred beyond the
matters expressly stated. We assume no obligation to supplement this opinion if
any applicable law changes after the date hereof or if we become aware of any
fact that might change the opinion expressed herein after the date hereof.

               This opinion is being furnished to you for submission to the
Commission as an exhibit to the Registration Statement. We hereby consent to the
filing of this opinion as an exhibit to the Registration Statement. In giving
this consent, we do not admit that we are within the category of persons whose
consent is required by Section 7 of the 1933 Act.

                                         Very truly yours,
                                         /s/ Venable LLP






                                                                     Exhibit (j)


CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


We  consent  to the  reference  to  our  firm  under  the  caption  "Independent
Registered  Public  Accounting  Firm" and to the  inclusion in the  Statement of
Additional Information  constituting part of this Pre-effective  Amendment No. 2
to the  registration  statement on Form N-1A (the  "Registration  Statement") of
TDAX Funds, Inc. of our report dated August 10, 2007, relating to the statements
of assets and liabilities of TDAX Funds,  Inc.  consisting of TDAX  Independence
2010  Exchange-Traded  Fund, TDAX Independence 2020  Exchange-Traded  Fund, TDAX
Independence 2030  Exchange-Traded  Fund, TDAX Independence 2040 Exchange-Traded
Fund,  and TDAX  Independence  In-Target  Exchange-Traded  Fund, as of August 6,
2007, which is also included in the Registration Statement.


/s/ Eisner LLP


New York, New York
August 10, 2007







                                                                     Exhibit (l)


                          The Depository Trust Company
           A subsidiary of The Depository Trust & Clearing Corporation

                    BLANKET ISSUER LETTER OF REPRESENTATIONS
                           [To be Completed by Issuer]




                                [Name of Issuer]


                                                                 [Date]




[For Municipal Issues:

Underwriting Department--Eligibility; 50th Floor]

[For Corporate Issues:

General Counsel's Office; 49th Floor]

The Depository Trust Company
55 Water Street
New York, NY 10041-0099

Ladies and Gentlemen:

This letter sets forth our understanding with respect to all issues (the
"Securities") that Issuer shall request be made eligible for deposit by The
Depository Trust Company ("DTC").

To induce DTC to accept the Securities as eligible for deposit at DTC, and to
act in accordance with DTC's Rules with respect to the Securities, Issuer
represents to DTC that Issuer will comply with the requirements stated in DTC's
Operational Arrangements, as they may be amended from time to time.

Note:                                                     Very truly yours,
---
Schedule A contains statements
that DTC believes accu-rately
describe DTC, the method of
effecting book-entry transfers
of securities distributed
through DTC, and certain
related matters.                                                       (Issuer)

                                           By:
Received and Accepted:                                    (Authorized Officer's
THE DEPOSITORY TRUST COMPANY                                   Signature)

                                                              (Print Name)

By:
                                                          (Street Address)


[LOGO OMITTED]                             (City) (State)  (Country)  (Zip Code)




                                                 (          )
                                                                  (Phone Number)


                                                                (E-mail Address)


--------------------------------------------------------------------------------





                                                                      SCHEDULE A

                                   (To Blanket Issuer Letter of Representations)

                        SAMPLE OFFERING DOCUMENT LANGUAGE
                       DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
                       -----------------------------------

 (Prepared by DTC--bracketed material may be applicable only to certain issues)

1. The Depository Trust Company ("DTC"), New York, NY, will act as securities
depository for the securities (the "Securities"). The Securities will be issued
as fully-registered securities registered in the name of Cede & Co. (DTC's
partnership nominee) or such other name as may be requested by an author-ized
representative of DTC. One fully-registered Security certificate will be issued
for [each issue of] the Securities, [each] in the aggregate principal amount of
such issue,and will be deposited with DTC. [If, however, the aggregate principal
amount of [any] issue exceeds $500 million, one certificate will be issued with
respect to each $500 million of principal amount, and an additional certificate
will be issued with respect to any remaining principal amount of such issue.]

2. DTC, the world's largest securities depository, is a limited-purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered pursuant to the provisions
of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides
asset servicing for over 2.2 million issues of U.S. and non-U.S. equity issues,
corporate and municipal debt issues, and money market instruments from over 100
countries that DTC's participants ("Direct Participants") deposit with DTC. DTC
also facilitates the post-trade settlement among Direct Participants of sales
and other securities transactions in deposited securities, through electronic
computerized book-entry transfers and pledges between Direct Participants'
accounts. This eliminates the need for physical movement of securities
certificates. Direct Participants include both U.S. and non-U.S. securities
brokers and dealers, banks, trust companies, clear-ing corporations, and certain
other organizations. DTC is a wholly-owned subsidiary of The Depository Trust &
Clearing Corporation ("DTCC"). DTCC, in turn, is owned by a number of Direct
Participants of DTC and Members of the National Securities Clearing Corporation,
Fixed Income Clearing Corporation and Emerging Markets Clearing Corporation
(NSCC, FICC, and EMCC, also subsidiaries of DTCC), as well as by the New York
Stock Exchange, Inc., the American Stock Exchange LLC, and the National
Association of Securities Dealers, Inc. Access to the DTC system is also
available to others such as both U.S. and non-U.S. securities brokers and
dealers, banks, trust companies, and clearing corporations that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). DTC has Standard & Poor's highest rating:
AAA. The DTC Rules applicable to its Participants are on file with the
Securities and Exchange Commission. More information about DTC can be found at
www.dtcc.com and www.dtc.org.

3. Purchases of Securities under the DTC system must be made by or through
Direct Participants, which will receive a credit for the Securities on DTC's
records. The ownership interest of each actual pur-chaser of each Security
("Beneficial Owner")is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase. Beneficial Owners are, however, expected to receive
written confirmations providing details of the transac-tion, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through
which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Securities are to be accomplished by entries made on the books
of Direct and Indirect Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership
interests in Securities, except in the event that use of the book-entry system
for the Securities is discontinued.

4. To facilitate subsequent transfers, all Securities deposited by Direct
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co., or such other name as may be requested by an authorized
representative of DTC. The deposit of





Securities with DTC and their registration in the name of Cede & Co. or such
other DTC nominee do not effect any change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Securities; DTC's records
reflect only the identity



--------------------------------------------------------------------------------



of the Direct Participants to whose accounts such Securities are credited, which
may or may not be the Beneficial Owners. The Direct and Indirect Participants
will remain responsible for keeping account of their holdings on behalf of their
customers.

5. Conveyance of notices and other communications by DTC to Direct Participants,
by Direct Participants to Indirect Participants, and by Direct Participants and
Indirect Participants to Beneficial Owners will be governed by arrangements
among them, subject to any statutory or regulatory require-ments as may be in
effect from time to time. [Beneficial Owners of Securities may wish to take
certain steps to augment the transmission to them of notices of significant
events with respect to the Securities, such as redemptions, tenders, defaults,
and proposed amendments to the Security documents. For exam-ple, Beneficial
Owners of Securities may wish to ascertain that the nominee holding the
Securities for their benefit has agreed to obtain and transmit notices to
Beneficial Owners. In the alternative, Beneficial Owners may wish to provide
their names and addresses to the registrar and request that copies of notices be
provided directly to them.]

[6. Redemption notices shall be sent to DTC. If less than all of the Securities
within an issue are being redeemed, DTC's practice is to determine by lot the
amount of the interest of each Direct Participant in such issue to be redeemed.]

7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote
with respect to Securities unless authorized by a Direct Participant in
accordance with DTC's Procedures. Under its usual procedures, DTC mails an
Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus
Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts Securities are credited on the record date
(identified in a listing attached to the Omnibus Proxy).

8. Redemption proceeds, distributions, and dividend payments on the Securities
will be made to Cede & Co., or such other nominee as may be requested by an
authorized representative of DTC. DTC's prac-tice is to credit Direct
Participants' accounts upon DTC's receipt of funds and corresponding detail
infor-mation from Issuer or Agent, on payable date in accordance with their
respective holdings shown on DTC's records. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices, as is the case with securities held for the accounts of customers in
bearer form or registered in "street name," and will be the responsibility of
such Participant and not of DTC, Agent, or Issuer, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of
redemption proceeds, distributions, and dividend payments to Cede & Co. (or such
other nominee as may be requested by an authorized representative of DTC) is the
responsibility of Issuer or Agent, dis-bursement of such payments to Direct
Participants will be the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners will be the responsibility of Direct and
Indirect Participants.

[9. A Beneficial Owner shall give notice to elect to have its Securities
purchased or tendered, through its Participant, to [Tender/Remarketing] Agent,
and shall effect delivery of such Securities by causing the Direct Participant
to transfer the Participant's interest in the Securities, on DTC's records, to
[Tender/Remarketing] Agent. The requirement for physical delivery of Securities
in connection with an optional tender or a mandatory purchase will be deemed
satisfied when the ownership rights in the Securities are transferred by Direct
Participants on DTC's records and followed by a book-entry credit of tendered
Securities to [Tender/Remarketing] Agent's DTC account.]

10. DTC may discontinue providing its services as depository with respect to the
Securities at any time by giving reasonable notice to Issuer or Agent. Under
such circumstances, in the event that a successor depository is not obtained,
Security certificates are required to be printed and delivered.

11. Issuer may decide to discontinue use of the system of book-entry-only
transfers through DTC (or a successor securities depository). In that event,
Security certificates will be printed and delivered to DTC.

12. The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that Issuer believes to be reliable, but Issuer
takes no responsibility for the accuracy thereof.



--------------------------------------------------------------------------------







                                                                  Exhibit (p)(1)


                                TDAX FUNDS, INC.

                                 CODE OF ETHICS
                                 --------------

                         Adopted Pursuant to Rule 17j-1

I.       Introduction

         The Board of Directors (the "Board") of TDAX Funds, Inc. (the
"Company"), in accordance with Rule 17j-1 under the Investment Company Act of
1940, as amended (the "1940 Act"), has approved and adopted this Code of Ethics
(the "Code") and has determined that this Code is reasonably designed to prevent
Access Persons, as defined herein, from engaging in conduct prohibited by Rule
17j-1. This Code also sets forth the general fiduciary principles to which all
of the Company's Access Persons are subject and establishes reporting
requirements for Access Persons. Certain capitalized terms used in this Code and
not defined in the text herein, such as "Access Persons," are defined in
Appendix A.

         A. About the Company and the Advisor

         The Company is a registered investment company that consists of
multiple investment portfolios of exchange-traded funds, each of which is
hereinafter referred to as a "Fund." XShares Advisors LLC (the "Advisor") is the
investment adviser for the Funds. Amerivest Investment Management, LLC and BNY
Investment Advisors act as investment sub-advisors to the Funds (each, a
"Sub-Advisor," and collectively, the "Sub-Advisors"). In managing the Funds, the
Advisor employs a passive, or indexing, strategy which seeks to replicate, for
each Fund's investment portfolio, the composition of each Fund's benchmark index
(the "Underlying Index"). A third party that is unaffiliated with the Advisor,
the Sub-Advisors, or the Company, Zacks Investment Research, is the creator of
each of the Underlying Indexes ("Zacks" or the "Index Creator"). In addition,
Zacks maintains the composition of each Underlying Index. As the index
administrator, Zacks alone decides the component securities in each Underlying
Index and typically reconstitutes each Underlying Index only quarterly. In
adopting this Code, the Board took into consideration all of these facts.

         B. Who is covered by the Code

         This Code applies to all Access Persons of the Company, which includes
all Directors of the Company (both Interested Directors and Independent
Directors), and all officers of the Company. However, certain of the reporting
requirements set forth in Section III do not apply to persons who are subject to
the code of ethics adopted by the Advisor or the Sub-Advisors ("Advisor Access
Persons"). Instead, those individuals (principally, the Company's Interested
Directors and those officers of the Company that are also affiliated with the
Advisor or Sub-Advisors) will be subject to the reporting requirements
established in the Advisor's or Sub-Advisors code of ethics.



II.      Statement of General Fiduciary Principles

         The Company requires that its Directors, officers and Access Persons
conduct their personal investment activities in accordance with the following
general fiduciary principles:

         o    the duty at all times to place the interests of the Company's
              shareholders first;

         o    the requirement that all personal securities transactions must be
              conducted consistent with this Code and in such a manner as to
              avoid any actual or potential conflict of interest or any abuse of
              an individual's position of trust and responsibility; and

         o    the fundamental standard that Company personnel should not take
              inappropriate advantage of their positions.


           In view of the foregoing, the provisions of Section 17(j) of the 1940
  Act, the Securities and Exchange Commission's (the "SEC") 1940 Act Release No.
  23958 "Personal Investment Activities of Investment Company Personnel" (August
  24, 1999), the "Report of the Advisory Group on Personal Investing" issued by
  the Investment Company Institute on May 9, 1994, the SEC's September 1994
  Report on "Personal Investment Activities of Investment Company Personnel,"
  and the SEC's 1940 Act Release No. 26492 "Investment Adviser Code of Ethics"
  (August 31, 2004), the Company has determined to adopt this Code to specify a
  code of conduct for certain types of personal securities transactions which
  might involve conflicts of interest or an appearance of impropriety and to
  establish reporting requirements and enforcement procedures.

III.     Restrictions on Personal Investing Activities

         A. General Policy

         No Access Person shall, in connection with the direct or indirect
  purchase or sale of a Security "held or to be acquired" by a Fund:

         o    employ any device, scheme or artifice to defraud the Funds;

         o    make any untrue statement of a material fact or omit to state a
              material fact necessary in order to make the statements, in light
              of the circumstances under which they are made, not misleading;

         o    engage in any act, practice or course of business that operates or
              would operate as a fraud or deceit upon the Funds; or

         o    engage in any manipulative practice with respect to the Funds.


                                      -2-


         B. Prohibition Against Insider Trading

         Access Persons and the members of their Family/Household are prohibited
from engaging in, or helping others engage in, insider trading. Generally, the
"insider trading" doctrine under U.S. federal securities laws prohibits any
person (including investment advisers) from knowingly or recklessly breaching a
duty owed by that person by:

              (1)  trading while in possession of material, nonpublic
                   information;

              (2)  communicating ("tipping") such information to others;

              (3)  recommending the purchase or sale of securities on the basis
                   of such information; or

              (4)  providing substantial assistance to someone who is engaged in
                   any of the above activities.

         This means that Access Persons and members of their Family/Household
may not trade with respect to a particular security or issuer at a time when
that person knows or should know that he or she is in possession of material
nonpublic information about the issuer or security. Information is considered
"material" if there is a substantial likelihood that a reasonable investor would
consider it important in making his or her investment decisions, or if it could
reasonably be expected to affect the price of a company's securities. Material
information can also relate to events or circumstances affecting the market for
a company's securities such as information about an expected government ruling
or regulation that can affect the business of a company in which a Fund invests.
Information is considered nonpublic until such time as it has been disseminated
in a manner making it available to investors generally (e.g., through national
business and financial news wire services).

         C. Pre-clearance of Investments in IPOs or Limited Offerings

         Access Persons who also meet the definition of Investment Personnel may
not directly or indirectly acquire Beneficial Ownership in any Securities in an
IPO or Limited Offering without obtaining, in advance of the transaction,
clearance from the Advisor's Chief Compliance Officer ("CCO"). In order to
obtain pre-clearance, a person meeting the definition of Investment Personnel
must complete and submit to the CCO a Personal Trade Request Form (a "PTR")
which is included as Appendix B. The CCO must review each request for approval
and record the decision regarding the request. If pre-clearance is obtained, the
approval is valid for the day on which it is granted and the immediately
following business day. The CCO may revoke a pre-clearance any time after it is
granted and before the transaction is executed.

         No pre-clearance will be given to an Access Person to purchase or sell
any IPO or Limited Offering of an issuer on a day when the security is "being
considered for purchase or sale" by a Fund.


                                      -3-



         D. Restrictions on Personal Securities Transactions by Access Persons
            other than Independent Directors and Advisor Access Persons
            ("Company-Only Access Persons")

         Each Company-Only Access Person shall direct his or her broker to
supply to the CCO, on a timely basis, duplicate copies of confirmations of all
Securities transactions, other than for Exempt Securities, in which the person
has, or by reason of such transaction acquires, any direct or indirect
Beneficial Ownership and copies of periodic statements for all securities
accounts.

              (1)  Pre-clearance

         Company-Only Access Persons may not buy or sell Securities, other than
Exempt Securities for any account in which he or she has any direct or indirect
Beneficial Ownership, unless such person obtains, in advance of the transaction,
clearance for that transaction from the Company's CCO or his designee.

         In order to obtain pre-clearance, a Company-Only Access Person must
complete and submit to the CCO a PTR. If the transaction is approved by the CCO,
that approval is valid for the day on which it is granted and the immediately
following business day. The CCO may revoke a pre-clearance any time after it is
granted and before the transaction is executed. No pre-clearance will be given
to a Company-Only Access Person to purchase or sell any security of an issuer on
a day when that security is "being considered for purchase or sale" by the Fund.

              (2)  Prohibition on Short-Term Trading

         Company-Only Access Persons may not purchase and sell, or sell and
purchase, within any period of 30 calendar days, a Security, other than an
Exempt Security, held by a Fund. If any such transactions occur, the Company
will require any profits from the transactions to be disgorged for donation by
the Company to charity. In applying the 30 calendar day holding period, the
Company will apply the "last-in, first-out" methodology.

              (3)  Prohibition on Short Sales and Similar Transactions.

         Company-Only Access Persons may not purchase a put option or sell a
call option, sell short or otherwise take a short position, either directly or
through any Beneficial Ownership, in any Security held by any Fund.

         E. Restrictions on Personal Securities Transactions by Access Persons
            who are Independent Directors

         The Company recognizes that Independent Directors do not have on-going,
day-to-day involvement with the operations of the Company and are not involved
in decisions regarding Fund portfolio transactions. In addition, it is the
practice of the Company to give information about Securities purchased or sold
by each Fund, or considered for purchase and sale by each Fund, to Independent
Directors in materials circulated more than 15 days after such Securities are
purchased or sold by a Fund or are considered for purchase or sale by a Fund.


                                      -4-


         Accordingly, the Company believes that less stringent controls are
appropriate for Independent Directors, as follows:

              1.   The Securities pre-clearance requirement contained in
                   paragraph III.D.l. and the short-term trading and short sale
                   restrictions in paragraph III.D.2 and III.D. 3 above shall
                   only apply to an Independent Director if he or she knew or,
                   in the ordinary course of fulfilling his or her official
                   duties as a director, should have known, that at the time of
                   his or her transaction in a Security (other than an Exempt
                   Security) or during the 15-day period before that
                   transaction, that the Security was also purchased or sold by
                   a Fund or considered for the purchase or sale by a Fund.

              2.   If the pre-clearance provisions of the preceding paragraph
                   apply, no pre-clearance will be given to an Independent
                   Director to purchase or sell any Security (1) if the Security
                   is included in, or has been removed from an Underlying Index,
                   until such time as the applicable Fund completes the
                   reconstitution of its portfolio to replicate that Security's
                   weighting in the Underlying Index, or (2) when the CCO has
                   been advised by the Advisor that the same Security is being
                   considered for purchase or sale for a Fund.

IV. Reporting Requirements and Procedures

         In order to provide the Company with information to enable it to
determine with reasonable assurance whether the provisions of this Code are
being observed by its Access Persons, the following reporting requirements
regarding personal securities transactions apply.

         A. Reporting Requirements for Company-Only Access Persons

              (1)  Initial and Annual Holdings Reports: Within ten days after a
                   person becomes a Company-Only Access Person, and annually
                   thereafter, such person shall submit to the CCO a completed
                   Initial/Annual Holdings Report substantially in the form
                   attached hereto as Appendix C. Each holdings report must
                   contain, at a minimum, (a) the title and type of Security,
                   and, as applicable, the exchange ticker symbol or CUSIP
                   number, number of shares and principal amount of each
                   Security (other than an Exempt Security) in which the person
                   has any direct or indirect beneficial ownership; (b) the name
                   of any broker, dealer or bank with whom the person maintains
                   an account in which any Securities other than Exempt
                   Securities are held for the person's direct or indirect
                   benefit; and (c) the date the person submits the report. The
                   Initial Holdings Report must be current as of a date no more
                   than 45 days prior to the date the person became a
                   Company-Only Access Person and the Annual Holdings Report
                   shall be submitted no later than January 31 and must be
                   current as of a date no more than 45 days prior to the date
                   the report is submitted.

              (2)  Quarterly Report: Each Company-Only Access Person shall
                   submit reports substantially in the form attached hereto as
                   Appendix D to the



                                      -5-



                   CCO, showing all transactions in Securities (other than
                   Exempt Securities) in which the person has, or by reason of
                   such transaction acquires, any direct or indirect beneficial
                   ownership, as well as all accounts established with brokers,
                   dealers or banks during the quarter in which any Securities,
                   other than Exempt Securities, were held for the direct or
                   indirect beneficial interest of the person. Such reports
                   shall be filed no later than 30 days after the end of each
                   calendar quarter. A Company-Only Access Person need not make
                   a quarterly transaction report under this paragraph if all of
                   the information required by this paragraph is contained in
                   the brokerage confirmations or account statements required to
                   be submitted under III.D above. The Report must include the
                   date on which such report was submitted to the CCO.

         B. Reporting Requirements for Independent Directors

         An Independent Director need not make an initial or annual holdings
  report described in paragraph IV.A.1 above and shall only be required to
  submit the quarterly report required under paragraph IV.A.2 for a transaction
  in a Security (other than an Exempt Security) where he or she knew (or should
  have known) at the time of the transaction or, in the ordinary course of
  fulfilling his or her official duties as a director, should have known that
  during the 15-day period immediately preceding or after the date of the
  transaction, such Security is or was purchased or sold, or considered for
  purchase or sale, by a Fund.

V. Administration of the Code

         A. The CCO's Duties and Responsibilities

              (1)  The CCO shall promptly provide all persons covered by this
                   Code with a copy of the Code. In addition, all persons
                   covered by this Code must complete the Acknowledgment
                   included as Appendix E within ten days of becoming subject to
                   this Code and must submit an Acknowledgment to the CCO by
                   January 31 each year thereafter;

              (2)  The CCO shall identify all Access Persons and all
                   Company-Only Access Persons and inform them of their
                   reporting obligations promptly;

              (3)  In determining whether to approve a PTR, the CCO will
                   determine, in good faith, whether the Access Person or
                   Company-Only Access Person knew, or should have known, that a
                   Fund had engaged in a transaction involving, or was
                   contemplating a transaction involving, such a Security with
                   15 days of the PTR. The CCO must maintain a record of any
                   decision relating to pre-clearance requests, and the reasons
                   supporting the decision, for at least five years after the
                   end of the fiscal year in which the approval is granted;

              (4)  The CCO will, on a quarterly basis, compare all reported
                   personal securities transactions with the Funds' completed
                   portfolio transactions during the quarter to determine
                   whether a Code violation may have


                                      -6-



                   occurred. The CCO may request additional information or take
                   any other appropriate measure that he or she decides is
                   necessary to aid in this determination;

              (5)  If the CCO finds that a Code violation may have occurred, the
                   CCO must report the possible violation to the Board;

              (6)  The CCO will submit his or her own reports (as required) to
                   an alternate compliance officer who will fulfill the duties
                   of the CCO with respect to such reports; and

              (7)  At least annually, the CCO must furnish to the Board, and the
                   Board must consider, a written report that describes any
                   issues arising under the Code since the previous report,
                   including, but not limited to, information about material
                   violations of the Code and sanctions imposed in response to
                   the material violations; and certifies that the Code contains
                   policies and procedures reasonably designed to prevent Access
                   Persons from violating the Code.

         B. The Board's Duties and Responsibilities

              (1)  The Board must approve this Code and the code of ethics of
                   the Advisor and the Sub-Advisors before initially retaining
                   their services;

              (2)  The Board must approve all material changes to this Code and
                   the code of ethics of the Advisor and the Sub-Advisors no
                   later than six months after adoption of the material change;
                   and

              (3)  The Board will determine, in its sole discretion, whether a
                   person has violated the Code. If it is determined that a
                   person violated the Code, the Board shall determine the
                   appropriate disciplinary action to be taken and sanctions to
                   be imposed.

         C. The Advisor's and Sub-Advisors' Duties and Responsibilities

              (1)  The Advisor and Sub-Advisor shall submit to the Board a copy
                   of its code of ethics adopted pursuant to Rule 17j-1;

              (2)  The Advisor and Sub-Advisor shall report to the Board in
                   writing any material change to their code of ethics within
                   six months of its adoption; and

              (3)  At least annually, the Advisor and Sub-Advisor shall furnish
                   to the Board, and the Board shall consider, a written report
                   that describes any issues arising under their respective code
                   of ethics since the previous report, including, but not
                   limited to, information about material violations of the code
                   of ethics or procedures and sanctions imposed in response to
                   the material violations; and certifies that the Advisor and
                   Sub-Advisors


                                      -7-



                   have adopted procedures reasonably necessary to prevent its
                   Access Persons from violating the code of ethics.

VI. Recordkeeping

         The Company will maintain records as set forth below. These records
will be maintained in accordance with Rule 17j-1 under the 1940 Act and the
following requirements. They will be available for examination by
representatives of the Securities and Exchange Commission (the "SEC") and other
regulatory agencies.

         A. A copy of this Code and any other code adopted by the Company which
            is, or at any time within the past five years has been, in effect
            will be preserved in an easily accessible place.

         B. A record of any Code violation and of any action taken as a result
            of the violation will be preserved in an easily accessible place for
            a period of at least five years following the end of the fiscal year
            in which the violation occurred.

         C. A copy of each report submitted by an Access Person under this Code
            will be preserved for a period of at least five years from the end
            of the fiscal year in which the report is made or the information is
            provided, for the first two years in an easily accessible place.

         D. A record of all persons, currently or within the past five years,
            who are or were required to submit reports under this Code, and a
            list of those who are or were responsible for reviewing these
            reports, will be maintained in an easily accessible place.

         E. A copy of each annual issues report and accompanying certification,
            as required by this Code, must be maintained for at least five years
            from the end of the fiscal year in which it is made, for the first
            two years in any easily accessible place.

VII. Miscellaneous

         A. Confidentiality. The Company will endeavor to maintain the
            confidentiality of all PTRs and any other information filed pursuant
            to this Code. Such reports and related information, however, may be
            produced to the SEC and other regulatory agencies.

         B. The "should have known" standard. For purposes of this Code, the
            "should have known" standard does not:

            o  imply a duty of inquiry;

            o  presume that the individual should have deduced or extrapolated
               from discussions or memoranda dealing with a Fund's investment
               strategies; or



                                      -8-



            o  impute knowledge from the individual's awareness of a Fund's
               portfolio holdings, market considerations, benchmark index, or
               investment policies, objectives and restrictions.



Adopted: July 24, 2007




                                      -9-



                                                                  Exhibit (p)(1)

                                   APPENDIX A

                                   Definitions
                                   -----------

         The definitions and terms used in this Code are intended to mean the
same as they do under the 1940 Act and the other federal securities laws. If a
definition hereunder conflicts with the definition in the 1940 Act or other
federal securities laws, or if a term used in this Code is not defined, the
definitions and meanings in the 1940 Act or other federal securities laws, as
applicable, should be followed.

Access Person means: (i) the Company's directors and officers; (ii) any Advisor
Access Person; (iii) any other any employee of the Company who, in connection
with his or her regular functions or duties, makes, participates in, or obtains
information regarding, the purchase or sale of a Security by the Company, or
whose functions relate to the making of any recommendations with respect to such
purchases or sales; (iv) any natural person in a control relationship to the
Company who obtains information concerning recommendations made to the Company
with regard to the purchase or sale of Securities; and (v) any director, officer
or general partner of the principal underwriter who, in the ordinary course of
business, makes, participates in or obtains information regarding, the purchase
or sale of Securities by the Company, or whose functions or duties in the
ordinary course of business relate to the making of any recommendation to the
Company regarding the purchase or sale of Securities. Access Persons include:

                  (a) a member of an Access Person's immediate family (spouse,
                  domestic partner, child or parents) who lives in an Access
                  Person's household (including children who are temporarily
                  living outside of the household for school, military service
                  or other similar situation);

                  (b) a relative of the person who lives in an Access Person's
                  household and over whose purchases, sales, or other trading
                  activities an Access Person directly or indirectly exercises
                  influence;

                  (c) a relative whose financial affairs an Access Person
                  "controls," whether by contract, arrangement, understanding or
                  by convention (such as a relative he or she traditionally
                  advises with regard to investment choices, invests for or
                  otherwise assists financially);

                  (d) an investment account over which an Access Person has
                  investment control or discretion;

                  (e) a trust or other arrangement that names an Access Person
                  as a beneficiary; and

                  (f) a non-public entity (partnership, corporation or
                  otherwise) of which an Access Person is a director, officer,
                  partner or employee, or in which he owns 10% or more of any
                  class of voting securities, a "controlling" interest as
                  generally defined by securities laws, or over which he
                  exercises effective control.


                                      A-1



         Advisor Access Person means a person who meets the definition of Access
Person with respect to the Advisor or the Sub-Advisors.

         Automatic Investment Plan means a program in which regular periodic
purchases (or withdrawals) are made automatically in (or from) investment
accounts in accordance with a predetermined schedule and allocation. An
Automatic Investment Plan includes a dividend reinvestment plan. However, any
transaction that overrides the pre-set schedule or allocations of the automatic
investment plan is not under the Automatic Investment Plan.

         Beneficial Ownership or Beneficially Owns means the same as it does
under Section 16 of the Securities Exchange Act of 1934 and Rule 16a-1(a)(2)
thereunder. A person is the "beneficial owner" of any securities in which he or
she has a direct or indirect pecuniary (monetary) interest.

         Control means the power to exercise a controlling influence over the
management or policies of a Fund, unless such power is solely the result of an
official position with such Fund. Any person who owns beneficially, either
directly or through one or more controlled companies, more than 25 per centum of
the voting securities of a Fund shall be presumed to control such Fund. Any
person who does not so own more than 25 per centum of the voting securities of
any Fund shall be presumed not to control such Fund. A natural person shall be
presumed not to be a controlled person within the meaning of this title. Any
such presumption may be rebutted by evidence, but except as otherwise provided
in accordance with applicable law, shall continue until a determination to the
contrary made by the SEC by order either on its own motion or on application by
an interested person.

         Exempt Security means: (i) direct obligations of the U.S. Government
(or any other "government security" as that term is defined in the 1940 Act),
bankers' acceptances, bank certificates of deposit, commercial paper and
High-Quality Short-Term Debt Instruments, including repurchase agreements, and
shares of registered open-end investment companies, other than exchange traded
funds, (ii) securities purchased or sold in any account over which the Access
Person has no direct or indirect influence or control, (iii) securities
purchased or sold in a transaction that is non-volitional on the part of either
the Access Person or a Company, including mergers, recapitalizations or similar
transactions, and (iv) securities acquired as a part of an Automatic Investment
Plan.

         Family/Household means a member of such person's immediate family
(spouse, domestic partner, child or parents) who lives in the person's household
(including children who are temporarily living outside of the household for
school, military service or other similar situation), and a relative of the
person who lives in such person's household.

         High Quality Short-Term Debt Instrument means any instrument that has a
maturity at issuance of less than 366 days and that is rated in one of the two
highest rating categories by a nationally recognized statistical rating
organization (e.g., Moody's Investors Service).

         Independent Director means a Director of the Company who is not an
"interested person" of the Company within the meaning of Section 2(a)(19) of the
1940 Act.



                                      A-2




         IPO (i.e., initial public offering) means an offering of securities
registered under the Securities Act of 1933 the issuer of which, immediately
before the registration, was not subject to the reporting requirements of
Sections 13 or 15(d) of the Securities Exchange Act of 1934.

         Interested Director means a Director of the Company who is an
"interested person" of the Company within the meaning of Section 2(a)(19) of the
1940 Act.

         Investment Personnel means (i) any employee of the Company or the
Advisor (or of any company in a control relationship to the Company or the
Advisor) who, in connection with his or her regular functions or duties, makes
or participates in making recommendations regarding the purchase or sale of
Securities by the Company, (ii) any natural person who controls the Company or
the Advisor and who obtains information concerning recommendations made to the
Company regarding the purchase or sale of Securities by that Company.

         Limited Offering means an offering that is exempt from registration
under the Securities Act of 1933 pursuant to Section 4(2), Section 4(6), Rule
504, Rule 505 or Rule 506 (e.g., private placements).

         Purchase or sale of a security includes, among other things, the
writing of an option to purchase or sell a security.

         Security or Securities means any note, stock, treasury stock, security
future, bond, debenture, evidence of indebtedness, certificate of interest or
participation in any profit-sharing agreement, collateral-trust certificate,
preorganization certificate or subscription, transferable share, investment
contract, voting-trust certificate, certificate of deposit for a security,
fractional undivided interest in oil, gas, or other mineral rights, any put,
call, straddle, option, or privilege on any security (including a certificate of
deposit) or on any group or index of securities (including any interest therein
or based on the value thereof), or any put, call, straddle, option, or privilege
entered into on a national securities exchange relating to foreign currency, or,
in general, any interest or instrument commonly known as a "security," or any
certificate of interest or participation in, temporary or interim certificate
for, receipt for, guarantee of, or warrant or right to subscribe to or purchase
any of the foregoing.

         A Security held or to be acquired by a Fund means: (i) any security
that within the most recent 15 days is or has been held by the Fund or is being
or has been considered by the Advisor for purchase by the Fund and (ii) any
option to purchase or sell, and any security convertible into or exchangeable
for, a security.


                                      A-3



                                                                  Exhibit (p)(1)


                                   APPENDIX B

                        Personal Trade Request Form (PTR)
                        ---------------------------------

         The following form must be completed by you in order to request
pre-clearance of a personal securities transaction that requires pre-clearance
under the Code of Ethics of either HealthShares(TM), Inc., TDAX Funds, Inc. or
XShares Advisors LLC. By signing below, you certify that you are not aware of
any trades for any Funds in this Security over the past 15 days and that you are
also not aware that the Advisor is planning on engaging in a trade involving
this Security over the next 15 days. You further certify that you do not have
any confidential or inside information relating to the issuer of this Security.
This Form must be submitted to the appropriate Company firm's Chief Compliance
Officer. You may not complete this trade until you receive approval from the
Chief Compliance Officer. If approved, the approval is good for the day it is
given and the following business day. If your trade is not completed within that
time, you must submit a new request.

Name: __________________

Social Security Number: _____________

Investment Information
Issuer and ticker symbol: _____________________


Nature of Equity Investments (please circle):

                  Common Stock      Preferred Stock

                  Number of Shares:  __________

Nature of Fixed Income Investments:

                  Describe instrument: __________

                  Principal amount of trade:  __________

Transaction Information
Transaction Type (please circle):

         Purchase        Sale       Short Sale

Estimated Trade Date:
                      ----------------------
Estimated Price:
                 ---------------------------
Broker/Dealer:
               -----------------------------
Is the proposed investment an IPO?                           Y       N
Is the proposed investment a Limited Offering?               Y       N

                  Signature:_____________________

                  Date:_______________________



                                      B-1


                                               Chief Compliance Officer Action

                                               Approved:________________

                                               Not Approved:_____________



                                      B-2



                                                                  Exhibit (p)(1)

                                   APPENDIX C

                       Initial and Annual Holdings Reports
                       -----------------------------------

To: The Chief Compliance Officer

HealthShares(TM), Inc
TDAX Funds, Inc.
XShares Advisors LLC


         As of _____________, a date within 45 calendar days of this submission,
I had direct or indirect beneficial ownership interest in the Securities listed
below which are required to be reported pursuant to the Code of Ethics of
HealthShares(TM), Inc., TDAX Funds, Inc. or XShares Advisors LLC.

Name of Reporting Person:

If Initial Report, Date Person Became Subject to the Code:

Information in Report Dated as of:

Date Report Submitted:

Securities Holdings:

Check here if, in lieu of completing the chart below, you have attached all of
your most recent investment account statements:_______, Number of statements
attached:__________

                                                              Principal Amount,
                                                              Maturity Date and
                       Ticker Symbol                          Interest Rate (if
 Title of Security     or CUSIP           Number of Shares    applicable)
-------------------    ----------------   ------------------  ------------------






         The name of all brokers, dealers or banks with whom I maintain an
account in which my securities are held for my direct or indirect benefit are as
follows

          Name of Broker, Dealer or Bank      Name(s) on and Type of Account
          ------------------------------      ---------------------------------


                                      C-1




         I certify that I have included on this report all securities holdings
and accounts required to be reported pursuant to the Code of Ethics and that the
information contained herein is accurate an complete.


   Signature:__________________                     Date:____________________






                                      C-2




                                                                  Exhibit (p)(1)


                                   APPENDIX D

                                Quarterly Report
                                ----------------

To: The Chief Compliance Officer

         HealthShares(TM), Inc.
         TDAX Funds, Inc.
         XShares Advisors LLC

         I hereby certify that I have engaged in the following personal
securities transactions which are required to be reported under the Code of
Ethics of HealthShares(TM), Inc., TDAX Funds, Inc. or XShares Advisors LLC
during the calendar quarter indicated below. I hereby submit this report within
30 days after the end of that quarter. (Note: you do not need to complete this
report if all of your trading confirmations and account statements are already
being delivered to the Chief Compliance Officer)

Name of Reporting Person:

Calendar Quarter Ended:

Date Report Submitted:

Securities Transactions

         Please provide the following information for any reportable
transactions during the quarter:



                                                                          Principal
                                                                          Amount,                      Name of
                                                                          Maturity                     Broker,
                                                                          Date and                     Dealer or
                               Ticker                                     Interest                     Bank
Date of          Title of      Symbol or       Number                     Rate (if       Type of       Effecting
Transaction      Security      CUSIP           of Shares      Price       applicable)    Transaction   Transaction
--------------   -----------   -----------     ------------   --------    -------------  ------------  --------------






         I have established the following new accounts with brokers, dealers or
banks in which my securities are held for my direct or indirect benefit.




  Name of Broker, Dealer or Bank           Date Account was Established           Name(s) on and Type of Account
-----------------------------------       ---------------------------------       ---------------------------------






                                      D-1




         I certify that I have included on this report all securities
transactions and accounts required to be reported pursuant to the Code of
Ethics.


Signature:___________________                      Date:___________________



                                      D-2



                                                                  Exhibit (p)(1)


                                   APPENDIX E

                                 Acknowledgment
                                 --------------

To:  Chief Compliance Officer

         HealthShares(TM), Inc.
         TDAX Funds, Inc.
         XShares Advisors LLC

Re:  Acknowledgment of Code of Ethics

     Initial Acknowledgment: Please check here if this is an initial
acknowledgment.                                                         |_|

     I certify that (1) I have received, read and understand this Code of
Ethics, (2) I am aware that I am subject to the provisions of this Code, (3) I
will comply with this Code, (4) I will report all holdings, transactions and
accounts that I am required to report pursuant to this Code.

     Annual Acknowledgment: Please check here if this is an annual
acknowledgment.                                                         |_|

     I certify that (1) I have received, read and understand this Code of
Ethics, (2) I am aware that I am subject to the provisions of this Code, (3) I
have complied with this Code at all times during the previous calendar year, and
(4) I have, during the previous calendar year, reported all holdings,
transactions and accounts that I am required to report pursuant to this Code.

Name (print):___________________________

Position:_______________________________

Signature:______________________________

Date Submitted:_________________________



                                      E-1







                                                                  Exhibit (p)(2)


                              XSHARES ADVISORS LLC

                                 CODE OF ETHICS
                                 --------------

                          Adopted Pursuant to Rule 204A

I.       Introduction

         XShares Advisors LLC (the "Advisor"), in accordance with the
requirements of Rule 204A of the Investment Advisers Act of 1940 (the "Advisers
Act"), has approved and adopted this Code of Ethics (the "Code"). This Code sets
forth the general fiduciary principles and standards of business conduct to
which all of the Advisor's employees are subject. This Code further sets forth
policies and procedures that are reasonably designed to prevent Access Persons,
as defined herein, from engaging in conduct prohibited by the Advisers Act and
establishes reporting requirements for these Access Persons. Certain capitalized
terms used in this Code and not defined in the text herein, such as "Access
Persons," are defined in Appendix A.

         A.       About the Advisor

         The Advisor is an investment adviser registered with the Securities and
Exchange Commission ("SEC") pursuant to the Advisers Act. The Advisor's sole
business is to act as investment adviser to certain registered investment
companies. As of the date hereof, the Advisor contemplates serving as investment
adviser only to registered open-end investment companies that consist of
multiple investment portfolios of exchange-traded funds, each of which is
hereinafter referred to as a "Fund." A current list of the Advisor's family of
exchange-traded funds is provided in Appendix B. In managing the Funds, the
Advisor employs a passive, or indexing, strategy which seeks to replicate, for
each Fund's investment portfolio, the composition of each Fund's benchmark index
(the "Underlying Index"). The Advisor acts as investment adviser to two
different types of Funds. The first type of Fund seeks to replicate the
portfolio of an Underlying Index that is created or sponsored by an affiliate of
the Adviser ("Affiliated ETF"). The second type of Fund seeks to replicate the
portfolio of an Underlying Index that is not created or sponsored by an
affiliate of the Adviser ("Un-Affiliated ETF"). The entity responsible for the
creation and sponsorship of an Underlying Index, including the development of
the Rules-Based Methodology which determines which securities are to be included
in an Underlying Index is known as the "Index Creator."

         The Advisor has delegated to one or more Sub-Advisors the
responsibility for the day-to-day management of the Funds. All investment
decisions will be made by, and implemented by the Sub-Advisor or Sub-Advisors,
as the case may be, subject to the overall supervision of the Advisor. For each
Fund, the composition of its Underlying Index is maintained by a third party
(the "Index Administrator") that is unaffiliated with the Advisor or the Fund.
The Index Administrator alone reconstitutes each Underlying Index, typically
quarterly. For Affiliated ETFs, certain officers or employees of the Advisor or
the Funds, or any affiliated person of the Advisor or the Funds) may assist the
Index Administrator in the performance of its duties. These persons are known as
"Index Staff." In connection with an order for Exemptive Relief for Affiliated
ETFs (the "Affiliated ETF Exemptive Order") obtained by the Advisor, the Advisor
and the Affiliated ETFs have developed certain firewall procedures (the
"Firewalls"), as





described in this Code, between the activities of the Index Staff, the
Sub-Advisors and other Investment Personnel of the Advisor or Sub-Advisors of
Affiliated ETFs. The Firewalls are reasonably designed to prevent the Index
Staff from having any advantage over other market participants with respect to
access to information concerning changes in the composition of each Underlying
Index or in the investment portfolios of the Affiliated ETFs that track the
Underlying Indices prior to disclosure. These Firewalls do not apply to
Un-Affiliated ETFs. In adopting this Code, the Board took into consideration all
of these facts.

         B.       Who is covered by the Code

         This Code applies to all employees of the Advisor. It is the
responsibility of each employee to immediately report to the Advisor's Chief
Compliance Officer ("CCO"), Richard Berenger, any known or suspected violations
of this Code, the Compliance Manual and the policies and procedures contained
therein, or of any other activity of any employee that could constitute a
violation of law. If you are aware of any activity in this regard, you should
contact the CCO immediately. Failure to report a potential violation could
result in disciplinary action against the non-reporting employee. The Advisor
will ensure that employees are not subject to retaliation in their employment as
a result of reporting a known or suspected violation.

         C.       Things You Need to Know to Use This Code

                  o        There are three reporting forms that Access Persons
                           have to fill out under this Code; the initial,
                           quarterly and annual holdings reports. Copies of
                           these forms are attached to this Code. You can get
                           copies of the reporting forms from the CCO.

                  o        All employees must complete the acknowledgement of
                           having received, read and understood this Code
                           (Appendix F) and renew that acknowledgment on a
                           yearly basis.

                  o        The CCO has the authority to grant written waivers of
                           the provisions of this Code in appropriate instances.
                           However, (i) it is expected that waivers will be
                           granted only in rare instances and, (ii) some
                           provisions of the Code are prescribed by SEC rules
                           and cannot be waived. These provisions include, but
                           are not limited to, the requirements that Access
                           Persons file reports and obtain pre-approval of
                           investments in IPOs and Limited Offerings.

                  o        Management of the Advisor and its compliance
                           personnel will review the terms and provisions of
                           this Code at least annually and make amendments as
                           necessary. Any amendments to this Code will be
                           provided to you.

II.      General Fiduciary Principles and Standards of Business Conduct

         A.       Acting as a Fiduciary

         It is the policy of the Advisor to act in the best interest of the
Funds and on the principles of full disclosure, good faith and fair dealing. The
Advisor recognizes that it has a fiduciary duty


                                      -2-



to the Funds. Acting as a fiduciary requires that the Advisor, consistent with
its other statutory and regulatory obligations, act solely in the Funds' best
interests and in the interest of Fund investors when providing investment advice
and engaging in other activities on behalf of the Funds. The Advisor and its
employees must seek to avoid situations which may result in potential or actual
conflicts of interest with these duties. To this end, the following principles
apply:

                  o        All employees must always observe the highest
                           standards of integrity and fair dealing and conduct
                           their personal and business dealings in accordance
                           with the letter, spirit and intent of all relevant
                           laws and regulations;

                  o        The Advisor must have a reasonable basis for the
                           investment advice and decisions it makes for the
                           Funds;

                  o        The Advisor must ensure that its investment decisions
                           are consistent with the Fund's investment objectives,
                           policies and disclosures to the Funds' Directors and
                           to its investors;

                  o        All employees must refrain from entering into
                           transactions, including personal securities
                           transactions, that are inconsistent with the
                           interests of the Funds or its investors;

                  o        Employees should not take inappropriate advantage of
                           their positions and may not, directly or indirectly,
                           use Fund opportunities for personal gain; and

                  o        Employees must be loyal to the Funds and place the
                           interests of the Funds and their investors above
                           their own.

         The Advisor treats violations of this Code very seriously. If you
violate this Code, the Advisor may take disciplinary measures against you,
including, without limitation, imposing penalties or fines, reducing your
compensation, demoting you, requiring unwinding of the trade, requiring
disgorgement of trading gains, suspending or terminating your employment, or any
combination of the foregoing.

         Improper trading activity can constitute a violation of this Code. You
can also violate this Code, however, by failing to file required reports, or by
making inaccurate or misleading reports or statements concerning trading
activity or securities accounts. Your conduct can violate this Code even if no
Funds or Fund investors are harmed by your conduct.

         If you have any doubt or uncertainty about what this Code requires or
permits, you should ask the CCO. Please do not guess at the answer.


                                      -3-



         B.       Compliance with the Federal Securities Laws

         Employees are required to comply with applicable federal securities
laws at all times. Examples of applicable federal securities laws include:

         o        the Securities Act of 1933, the Securities Exchange Act of
                  1934, the Sarbanes-Oxley Act of 2002 and the SEC rules
                  thereunder;

         o        the Investment Advisers Act of 1940 and the SEC rules
                  thereunder;

         o        the Investment Company Act of 1940 and the SEC rules
                  thereunder;

         o        title V of the Gramm-Leach-Bliley Act of 1999 (privacy and
                  security of client non-public information); and

         o        the Bank Secrecy Act, as it applies to mutual funds and
                  investment advisers, and the SEC and Department of the
                  Treasury rules thereunder.

         C.       Conflicts of Interest

         Personal Conflicts. All employees must avoid establishing financial
interests or outside affiliations which may create a conflict, or appear to
create a conflict, between the employee's personal interests and the interests
of the Advisor, the Funds, or the investors in the Funds. A potential conflict
of interest exists whenever an employee has a direct financial or other personal
interest in any transaction or proposed transaction involving the Advisor or any
of the Funds. A conflict of interest may also exist where the employee has an
indirect interest in a transaction, for example, because the transaction will
benefit someone with whom the employee has a friendship or other personal
relationship.

         In such situations, employees must disclose the conflict to the CCO and
recuse themselves from the decision making process with respect to the
transaction in question and from influencing or appearing to influence the
relationship between the Advisor or any of the Funds and the customer involved.
Employees may not use knowledge of a pending or currently considered securities
transaction for a Fund or reconstitution of an Underlying Index for an
Affiliated ETF to profit personally, directly or indirectly, as a result.

         Conflict of Interest between the Advisor and a Fund. In certain
instances, the Advisor's relationship with a Fund may require the Advisor to
place the Fund's interest above its own interests. If an employee becomes aware
of a situation where the Advisor's pursuit of its own interests in a transaction
appears to conflict with its obligations to a Fund, he or she should bring the
situation to the immediate attention of the CCO.

         The Appearance of a Conflict of Interest Must Be Avoided. All employees
are expected to be objective in making business decisions and to consider any
improper interest or influence that could arguably impair that objectivity. In
determining whether there is an appearance of conflict, each employee should
determine whether a reasonable, disinterested observer (i.e., investor,
supplier, broker, an acquaintance, examiner or a government representative)
would have any grounds to believe:



                                      -4-



         o        That the Advisor was serving its own interests or one Fund's
                  interests at the expense of another; or

         o        That business with the Funds or the Advisor was done on the
                  basis of friendship, family ties, the giving and receiving of
                  gifts, or to curry favor with some specific entity or
                  individual rather than on the merits.

         If an employee's participation in a decision making process would raise
the appearance of conflict of interest, the employee should inform his or her
manager immediately.

         Outside Business Activities. All employee board memberships, advisory
positions, trade group positions, management positions, or any involvement with
public companies must be fully disclosed and submitted for prior approval to the
CCO, with the exception of purely charitable or civic involvements which do not
impinge on the employee's full-time work commitment to the Advisor. Approval
must be obtained through the CCO, and will ordinarily require consideration by
senior officers of the Advisor. The Advisor can deny approval for any reason.
This prohibition does not apply to service as an officer or board member of any
parent or subsidiary of the Advisor.

         Gifts and Gratuities. No employee may accept or receive on their own
behalf or on behalf of the Advisor any gift or other accommodation which has a
value in excess of a de minimis amount (currently $100) from any vendor, broker,
public company, securities salesman, client or prospective client (a "business
contact"). No employee may accept cash gifts or cash equivalents from any such
person. This prohibition applies equally to gifts to members of the
Family/Household of an employee.

         No employee may give on their own behalf or on behalf of the Advisor
any gift or other accommodation to a business contact that may be construed as
an improper attempt to influence the recipient. These policies are not intended
to prohibit normal business entertainment.

         Entertainment and Meals. Payment for entertainment or meals where the
employee is not accompanied by the person purchasing the entertainment or meals
is considered a gift, subject to the rules discussed above. Acceptance of meals
and entertainment where the host is present is generally permitted. However, the
acceptance of particularly lavish entertainment or entertainment with excessive
frequency is generally inappropriate and should be refused. Entertainment in
poor taste or that adversely reflects on the morals or judgment of the
individuals attending the event is considered inappropriate and also should be
refused. Individuals involved in the purchase of equipment, supplies, and
services may not accept entertainment or meals from a vendor or potential vendor
except if business is to be discussed. Finally, under no circumstances should
entertainment be accepted which may affect or be construed to affect any future
dealing with that person.

         Preferential Treatment. Employees must make investment decisions,
undertake commitments, and perform their duties and obligations without
favoritism of any kind and award business or contracts strictly on the basis of
merit. An employee should not actively seek nor accept a discount on any item
for personal use from a business contact. If such a person extends preferential
treatment (for example, offers a discount) to an employee in a personal
transaction,


                                      -5-



the employee must have the preferential treatment pre-approved by the CCO before
proceeding with the transaction.

         Borrowing. Employees should borrow only from reputable organizations
that regularly lend money. (Borrowing from relatives, however, is not subject to
restriction.) If an employee borrows from any financial institution, the loan
must not involve favored treatment of any kind based upon their employment with
the Advisor.

         D.       Standards of Business Conduct

         General. Employees are expected to conduct themselves at all times in a
manner consistent with the highest professional standards. Each employee
accordingly must devote his or her attention and skills to the performance of
his or her responsibilities and avoid activities that interfere with that
responsibility or that are detrimental to the Advisor and its reputation.

         Communications with Investors and Funds. All communications with
investors and Funds, whether verbal or written, must convey information clearly
and fairly. Employees must comply with the Advisor's communications policies and
procedures. Exaggerated, unwarranted or misleading statements or claims are
prohibited.

         Disclosure of Confidential Information. In the course of conducting
business, employees may become privy to confidential information about the
Advisor, its present and prospective investors and investments, the Funds, the
Underlying Indices, Index Eligible Companies (with respect to Affiliated ETFs),
and Fund Agents. It is a violation of this Code, and in some cases may be a
violation of law, for any employee to disclose to anyone other than another
employee any confidential information obtained while in the course of conducting
business on behalf of the Advisor. Disclosure to other employees should be made
only when and to the extent necessary to further the legitimate business
purposes of the Advisor. Employees may not use any such information in
connection with their personal investments or investments of others subject to
their control.

         Investor Information. Fund investors and investors in the parent of the
Advisor have the right to expect the Advisor and its employees to treat
information concerning their business dealings in the strictest confidence.
Accordingly, no one may divulge investor confidences except in accordance with
the Advisor's privacy policy and unless the party to whom a disclosure is made
is legitimately entitled to the information (i.e., needs to know the information
in furtherance of the investor's business) or the investor gives prior consent
to the disclosure. Any such prior consent should be documented in advance of
disclosure.

         Company Information. Confidential information about the Advisor, its
parent or other affiliated companies, that is obtained by an employee, including
its investors, products, processes, financial condition, plans, patents, or
licenses may not be disclosed to persons outside of the organization, except
with the approval of senior management and to further the legitimate business
purposes of the Advisor.

         Discretion should always be used when handling confidential investor
information or company information, and such information should never be
disseminated to an unauthorized person. Employees are reminded that when it is
necessary to carry sensitive information off the


                                      -6-



firm's premises, they should take appropriate care for its security.
Specifically, employees should avoid casually displaying documents or engaging
in confidential business conversations in public places, including, but not
limited to, elevators, hallways, restrooms, airports, and in public
transportation. Employees who take documents or computer files off the premises
to work at home should return all such materials to the Advisor upon completion
of the particular at home project. Any questions about the confidential nature
of information or whether confidential information may be disclosed should
immediately be referred to the CCO.

         Corporate Assets. All information, products and services connected to
or generated by the Advisor or the Funds as a business are considered corporate
assets to which the Advisor or the Funds has ownership rights. Corporate
property utilized or developed by employees during their employment, including,
but not limited to, files, analysis, reference materials, reports, written or
e-mail correspondence, trade secrets, client lists, strategies, computer
hardware and software, data processing systems, computer programs and databases,
remains exclusively the Advisor's property both during employment and after the
employee leaves the firm. Accordingly, all employees are expected to protect the
Advisor's ownership or property including all information, products, and
services and to return all information to the Advisor at the termination of
employment.

         Further, employees are prohibited from misusing the Advisor's corporate
assets (including use of assets for a non-business purpose, theft, inflation of
expenses, etc.) and from misusing or removing those assets from the premises
upon leaving the firm. Before beginning employment with the Advisor, each
employee should give his or her manager a copy or any non-competition,
non-disclosure or non-pirating agreement by which the employee is bound at the
time of hiring. Any questions about this requirement should be raised with
senior management.

         Money Laundering. Every employee bears responsibility for recognizing
suspicious transaction or investor activity that may constitute money laundering
(including the structuring of deposits) and that may involve proceeds from
unlawful activities such as drug trafficking or racketeering. In particular,
employees should be aware that even the simple receipt of funds, including
through wire transfers, which are derived from illegal activities can subject
them to prosecution for money laundering. Any suspicious deposit or customer
activity which causes an employee concern about the source of an investor's
funds should be promptly reported to the CCO.

         Bribery. Under federal law, it is illegal for the Advisor or any
employee to pay, offer to pay, or authorize a payment of any money or other
thing of value to:

         o        an official of a local, state, federal or foreign government
                  or an agency of a local, state, federal or foreign government;

         o        a political party or official thereof, or a candidate for
                  political office; or

         o        any other person the payor knows or has reason to know will
                  pay or give the money or value to those listed above.



                                      -7-



         Where the purpose is to influence the recipient to take or refrain from
taking any official action or to induce the recipient to use his or her
influence to affect governmental action to obtain, retain, or direct business
for the Advisor or the Funds, offering or making any such remuneration or
consideration to a domestic or foreign government official, political party or
candidate for political office is strictly prohibited. All employees must
immediately report all invitations to accept a bribe or any proposal or
suggestion of a similar illegal nature to the CCO.

         Relations with Regulators. It is the Advisor's policy to cooperate with
government authorities and regulators during routine audits and examinations, as
well as inquiries and investigations. The CCO must immediately be made aware of
any requests from government authorities or regulators and should be involved in
responding to all such inquiries in order to be certain that we are providing
complete and accurate information to regulators, as well as to ensure awareness
of pending inquiries that may require us to maintain certain records.

III.     Restrictions on Personal Trading Activity

         A.       General Policy

         No employee shall, in connection with the direct or indirect purchase
or sale of a Security "held or to be acquired" by a Fund:

                  o        employ any device, scheme or artifice to defraud the
                           Funds;

                  o        make any untrue statement of a material fact or omit
                           to state a material fact necessary in order to make
                           the statements, in light of the circumstances under
                           which they are made, not misleading;

                  o        engage in any act, practice or course of business
                           that operates or would operate as a fraud or deceit
                           upon the Funds; or

                  o        engage in any manipulative practice with respect to
                           the Funds. -

         B.       Prohibition Against Insider Trading

         Employees and the members of their Family/Household are prohibited from
engaging in, or helping others engage in, insider trading. Generally, the
"insider trading" doctrine under U.S. federal securities laws prohibits any
person (including investment advisers) from knowingly or recklessly breaching a
duty owed by that person by:

                  (1)      trading while in possession of material, nonpublic
                           information;

                  (2)      communicating ("tipping") such information to others;

                  (3)      recommending the purchase or sale of securities on
                           the basis of such information; or

                  (4)      providing substantial assistance to someone who is
                           engaged in any of the above activities.



                                      -8-



         This means that employees and members of their Family/Household may not
trade with respect to a particular security or issuer at a time when that person
knows or should know that he or she is in possession of material nonpublic
information about the issuer or security. Information is considered "material"
if there is a substantial likelihood that a reasonable investor would consider
it important in making his or her investment decisions, or if it could
reasonably be expected to affect the price of a company's securities. Material
information can also relate to events or circumstances affecting the market for
a company's securities such as information about an expected government ruling
or regulation that can affect the business of a company in which the Fund may
invest. Information is considered nonpublic until such time as it has been
disseminated in a manner making it available to investors generally (e.g.,
through national business and financial news wire services).

         C.       Investment Personnel Pre-clearance of Investments in IPOs or
                  Limited Offerings.

         Access Persons who also meet the definition of Investment Personnel may
not directly or indirectly acquire Beneficial Ownership in any Securities in an
IPO or Limited Offering without obtaining, in advance of the transaction,
clearance from the Advisor's CCO. In order to obtain pre-clearance, a person
meeting the definition of Investment Personnel must complete and submit to the
CCO a Personal Trade Request Form (a "PTR") which is included as Appendix C. The
CCO must review each request for approval and record the decision regarding the
request. If pre-clearance is obtained, the approval is valid for the day on
which it is granted and the immediately following business day. The CCO may
revoke a pre-clearance any time after it is granted and before the transaction
is executed.

         With respect to Affiliated ETFs, no pre-clearance will be given to an
Access Person to purchase or sell any IPO or Limited Offering of an issuer that
is also an Index Eligible Company (1) during a Reconstitution Month, (2) if the
Security is included in, or has been removed from an Underlying Index, until
such time as the applicable Fund completes the reconstitution of its portfolio
to replicate that Security's weighting in the Underlying Index, or (3) for
Access Persons who also fall within the definition of Index Staff, on a day when
the Index Eligible Company is under "Active Consideration" as defined herein.

         With respect to Un-Affiliated ETFs, no pre-clearance will be given to
an Access Person to purchase or sell any IPO or Limited Offering of an issuer on
a day when the security is being considered for purchase or sale by the Fund.

         D.       Restrictions on Personal Securities Transactions by Access
                  Persons.

         Each Access Person shall direct his or her broker to supply to the CCO,
on a timely basis, duplicate copies of confirmations of all Securities
transactions, other than for Exempt Securities, in which the person has, or by
reason of such transaction acquires, any direct or indirect Beneficial Ownership
and copies of periodic statements for all securities accounts.

                  (1)      Pre-clearance

                  Access Persons may not buy or sell Securities, other than
Exempt Securities, for any account in which he or she has any direct or indirect
Beneficial Ownership, unless such person obtains, in advance of the transaction,
clearance for that transaction from the CCO.



                                      -9-



                  In order to obtain pre-clearance, an Access Person must
complete and submit to the CCO a PTR. If the transaction is approved by the CCO,
that approval is valid for the day on which it is granted and the immediately
following business day. The CCO may revoke a pre-clearance any time after it is
granted and before the transaction is executed.

                  With respect to Affiliated ETFs, no pre-clearance will be
given to an Access Person to purchase or sell any Index Eligible Company
Security (1) during a Reconstitution Month, (2) if the Security is included in,
or has been removed from an Underlying Index, until such time as the applicable
Fund completes the reconstitution of its portfolio to replicate that Security's
weighting in the Underlying Index, or (3) for Access Persons who also fall
within the definition of Index Staff, on a day when the Index Eligible Company
is under "Active Consideration" as defined herein.

         With respect to Un-Affiliated ETFs, no pre-clearance will be given to
an Access Person to purchase or sell any security of an issuer on a day when the
security is being considered for purchase or sale by the Fund.

                  (2)      Blackout Period

                  With respect to Affiliated ETFs, no Access Person may buy or
sell any Security of an Index Eligible Company during a Reconstitution Month.

                  (3)      Prohibition on Short-Term Trading.

                  Access Persons may not purchase and sell, or sell and
purchase, within any period of 30 calendar days, a Security, other than an
Exempt Security, held by a Fund. If any such transactions occur, the Advisor
will require any profits from the transactions to be disgorged for donation by
the Advisor to charity. In applying the 30 calendar day holding period, the
Advisor will apply the "last-in, first-out" methodology.

                  (4)      Prohibition on Short Sales and Similar Transactions

                  Access Persons may not purchase a put option or sell a call
option, sell short or otherwise take a short position, either directly or
through any Beneficial Ownership, in any Security held by any Fund.

         E.       Reporting Requirements and Procedures

         In order to provide the Advisor with information to enable it to
determine with reasonable assurance whether the provisions of this Code are
being observed by its Access Persons, the following reporting requirements
regarding personal securities transactions apply.

                  (1)      Initial and Annual Holdings Reports: Within ten days
                           after a person becomes an Access Person, and annually
                           thereafter, such person shall submit to the CCO a
                           completed Initial/Annual Holdings Report
                           substantially in the form attached hereto as Appendix
                           D. Each holdings report must contain, at a minimum,
                           (a) the title and type of Security, and as
                           applicable, the exchange ticker symbol or CUSIP
                           number, number of


                                      -10-



                           shares and principal amount of each Security (other
                           than an Exempt Security) in which the person has any
                           direct or indirect beneficial ownership; (b) the name
                           of any broker, dealer or bank with whom the person
                           maintains an account in which any Securities other
                           than Exempt Securities are held for the person's
                           direct or indirect benefit; and (c) the date the
                           person submits the report. The Initial Holdings
                           Report must be current as of a date no more than 45
                           days prior to the date the person became an Access
                           Person and the Annual Holdings Report shall be
                           submitted no later than January 31 and must be
                           current as of a date no more than 45 days prior to
                           the date the report is submitted.

                  (2)      Quarterly Report: Each Access Person shall submit
                           reports substantially in the form attached hereto as
                           Appendix E to the CCO, showing all transactions in
                           Securities (other than Exempt Securities) in which
                           the person has, or by reason of such transaction
                           acquires, any direct or indirect beneficial
                           ownership, as well as all accounts established with
                           brokers, dealers or banks during the quarter in which
                           any Securities, other than Exempt Securities, were
                           held for the direct or indirect beneficial interest
                           of the person. Such reports shall be filed no later
                           than 30 days after the end of each calendar quarter.
                           An Access Person need not make a quarterly
                           transaction report under this paragraph if all of the
                           information required by this paragraph is contained
                           in the brokerage confirmations or account statements
                           required to be submitted under this Code. The Report
                           must include the date on which such report was
                           submitted to the CCO.

         F.       Administration of the Code

                           The CCO's Duties and Responsibilities include:

                  (1)      The CCO shall promptly provide all persons covered by
                           this Code with a copy of the Code. In addition, all
                           persons covered by this Code must complete the
                           Acknowledgment included as Appendix F within ten days
                           of becoming subject to this Code and must submit an
                           Acknowledgment to the CCO by January 31 each year
                           thereafter;

                  (2)      The CCO shall identify all Access Persons and inform
                           them of their reporting obligations promptly. In this
                           regard, the CCO will prepare and make available to
                           all Access Persons, a list of Index Eligible
                           Companies;

                  (3)      In determining whether to approve a PTR, the CCO will
                           determine, in good faith, whether the Access Person
                           knew, or should have know, that a Fund had engaged in
                           a transaction involving, or was contemplating a
                           transaction involving, such a Security with 15 days
                           of the PTR. The CCO must maintain a record of any
                           decision relating to pre-clearance requests, and the
                           reasons supporting the decision, for at least five
                           years after the end of the fiscal year in which the
                           approval is granted;


                                      -11-


                  (4)      The CCO will, on a quarterly basis, compare all
                           reported personal securities transactions with the
                           Funds' completed portfolio transactions during the
                           quarter to determine whether a Code violation may
                           have occurred. The CCO may request additional
                           information or take any other appropriate measure
                           that he or she decides is necessary to aid in this
                           determination;

                  (5)      If the CCO finds that a Code violation may have
                           occurred, the CCO must report the possible violation
                           to senior management and to the Board of Directors of
                           the applicable Fund;

                  (6)      The CCO will submit his or her own reports (as
                           required) to an alternate compliance officer who will
                           fulfill the duties of the CCO with respect to such
                           reports; and

                  (7)      At least annually, the CCO must furnish to senior
                           management and to the Board of Directors of each
                           Fund, a written report that describes any issues
                           arising under the Code since the previous report,
                           including, but not limited to, information about
                           material violations of the Code and sanctions imposed
                           in response to the material violations; and certifies
                           that the Code contains policies and procedures
                           reasonably designed to prevent Access Persons from
                           violating the Code.

IV.      Firewall Procedures for Index Staff Personnel- Applicable to Affiliated
         ETFs Only

         In connection with the Affiliated ETF Exemptive Order obtained by the
Advisor, the Advisor and the Affiliated ETFs, including any affiliated person of
the Advisor or the Affiliated ETFs, have agreed to employ the following
procedures with respect to persons meeting the definition of Index Staff. As a
result, Index Staff personnel as subject to the following special restrictions
and conditions:

         A.       Index Staff personnel shall not be Investment Personnel. Index
                  Staff personnel shall have no responsibility for the
                  management of the Funds or the supervision or oversight of the
                  Sub-Advisors.

         B.       Index Staff personnel are expressly prohibited from sharing
                  any information relating to the Rules Based Methodology
                  (including information regarding prospective or potential
                  changes to the Rules Based Methodology) with any Investment
                  Personnel or any officer or employee of the Sub-Advisors.
                  Information relating to the Rules Based Methodology is
                  considered proprietary and confidential information and Index
                  Staff personnel are therefore subject to the Advisor's
                  policies and procedures relating to the non-disclosure and
                  protection of confidential information.

         C.       Index Staff personnel may not buy or sell any Index Eligible
                  Security on a day when such Security is under Active
                  Consideration, as defined herein.



                                      -12-



         D.       Index Staff personnel will have office space only at the
                  Advisor and such space shall be separate and apart from office
                  space of Investment Personnel. Index Staff personnel shall not
                  have access to the computer systems of Investment Personnel or
                  the Sub-Advisors.

V.       Recordkeeping

         The Advisor will maintain records as set forth below. These records
will be maintained in accordance with Rule 204A under the Advisers Act and the
following requirements. They will be available for examination by
representatives of the SEC and other regulatory agencies.

         A.       A copy of this Code and any other code adopted by the Advisor
                  which is, or at any time within the past five years has been,
                  in effect will be preserved in an easily accessible place.

         B.       A record of any Code violation and of any action taken as a
                  result of the violation will be preserved in an easily
                  accessible place for a period of at least five years following
                  the end of the fiscal year in which the violation occurred.

         C.       A copy of each report submitted by an Access Person under this
                  Code will be preserved for a period of at least five years
                  from the end of the fiscal year in which the report is made or
                  the information is provided, for the first two years in an
                  easily accessible place.

         D.       A record of all persons, currently or within the past five
                  years, who are or were required to submit reports under this
                  Code, and a list of those who are or were responsible for
                  reviewing these reports, will be maintained in an easily
                  accessible place.

         E.       A copy of each annual issues report and accompanying
                  certification, as required by this Code, must be maintained
                  for at least five years from the end of the fiscal year in
                  which it is made, for the first two years in any easily
                  accessible place.

VI.      Miscellaneous

         A.       Confidentiality. The Advisor will endeavor to maintain the
                  confidentiality of all PTRs and any other information filed
                  pursuant to this Code. Such reports and related information,
                  however, may be produced to the SEC and other regulatory
                  agencies.

         B.       The "should have known" standard. For purposes of this Code,
                  the "should have known" standard does not:

                  o        imply a duty of inquiry;

                  o        presume that the individual should have deduced or
                           extrapolated from discussions or memoranda dealing
                           with a Fund's investment strategies; or


                                      -13-



                  o        impute knowledge from the individual's awareness of a
                           Fund's portfolio holdings, market considerations,
                           benchmark index, or investment policies, objectives
                           and restrictions.

Adopted: July 24, 2007


                                      -14-



                                                                  Exhibit (p)(2)

                                   Appendix A

                                   Definitions
                                   -----------

         The definitions and terms used in this Code are intended to mean the
same as they do under the Advisers Act and the other federal securities laws. If
a definition hereunder conflicts with the definition in the Advisers Act or
other federal securities laws, or if a term used in this Code is not defined,
the definitions and meanings in the Advisers Act or other federal securities
laws, as applicable, should be followed.

         Access Person means: (i) Every member of the board of the Advisor's
parent, (ii) every officer of the Advisor or its parent, (iii) every employee of
the Advisor (or employees of the parent of the Advisor) who, in connection with
his or her regular functions or duties, makes, participates in or obtains
information regarding the purchase or sale of a Security for any Fund, or has
access to nonpublic information about the portfolio holdings of any Fund, or
whose functions relate to the making of any recommendations with respect to
purchases and sales, (iv) every other person (whether or not an employee of the
Advisor, such as consultants) who is subject to the Advisor's supervision and
control who has access to nonpublic information regarding any purchase or sale
of securities of any Fund, or has access to nonpublic information about the
portfolio holdings of any Fund and (v) with respect to Affiliated ETFs, persons
who meet the definition of "Index Staff" herein. Access Persons include:

                  (a) a member of an Access Person's immediate family (spouse,
                  domestic partner, child or parents) who lives in an Access
                  Person's household (including children who are temporarily
                  living outside of the household for school, military service
                  or other similar situation);

                  (b) a relative of the person who lives in an Access Person's
                  household and over whose purchases, sales, or other trading
                  activities an Access Person directly or indirectly exercises
                  influence;

                  (c) a relative whose financial affairs an Access Person
                  "controls", whether by contract, arrangement, understanding or
                  by convention (such as a relative he or she traditionally
                  advises with regard to investment choices, invests for or
                  otherwise assists financially);

                  (d) an investment account over which an Access Person has
                  investment control or discretion;

                  (e) a trust or other arrangement that names an Access Person
                  as a beneficiary; and

                  (f) a non-public entity (partnership, corporation or
                  otherwise) of which an Access Person is a director, officer,
                  partner or employee, or in which he owns 10% or more of any
                  class of voting securities, a "controlling" interest as
                  generally defined by securities laws, or over which he
                  exercises effective control.

         Active Consideration, when used in this Code means the Security (i) is
included in an Underlying Index, or (ii) it is being added to an Underlying
Index in connection with either (A) a


                                      A-1



regular reconstitution of the Underlying Index, or (B) a reconstitution of the
Underlying Index in connection with a change in the Rules Based methodology. A
Security described in clause (i) above is considered to be under Active
Consideration while it is in an Underlying Index and until the end of the
calendar month after it has been removed from an Underlying Index. A Security
described in clause (ii)(A) above shall be considered to be under Active
Consideration from the time of the initial screening of the Underlying Index in
connection with its next regular reconstitution. A Security described in clause
(ii)(B) above shall be deemed to be under Active Consideration beginning on such
date that the Security can be identified using the changed methodology as a
Security that will be included in the Underlying Index.

         Automatic Investment Plan means a program in which regular periodic
purchases (or withdrawals) are made automatically in (or from) investment
accounts in accordance with a predetermined schedule and allocation. An
Automatic Investment Plan includes a dividend reinvestment plan. However, any
transaction that overrides the pre-set schedule or allocations of the automatic
investment plan is not under the Automatic Investment Plan.

         Beneficial Ownership or Beneficially Owns means the same as it does
under Section 16 of the Securities Exchange Act of 1934 and Rule 16a-1(a)(2)
thereunder. A person is the "beneficial owner" of any securities in which he or
she has a direct or indirect pecuniary (monetary) interest.

         Control means the power to exercise a controlling influence over the
management or policies of the Advisor. Any person who owns beneficially, either
directly or through one or more controlled companies, more than 25 per centum of
the voting securities of the Advisor shall be presumed to control the Advisor. A
natural person shall be presumed not to be a controlled person within the
meaning of this title. Any such presumption may be rebutted by evidence, but
except as hereinafter provided, shall continue until a determination to the
contrary made by the SEC by order either on its own motion or on application by
an interested person.

         Exempt Security means: (i) direct obligations of the U.S. Government
(or any other "government security" as that term is defined in the 1940 Act),
bankers' acceptances, bank certificates of deposit, commercial paper and
High-Quality Short-Term Debt Instruments, including repurchase agreements, and
shares of registered open-end investment companies, other than Reportable Funds,
(ii) securities purchased or sold in any account over which the Access Person
has no direct or indirect influence or control, (iii) securities purchased or
sold in a transaction that is non-volitional on the part of the Access Person,
including mergers, recapitalizations or similar transactions, and (iv)
securities acquired as a part of an Automatic Investment Plan.

         Family/Household means a member of such person's immediate family
(spouse, domestic partner, child or parents) who lives in the person's household
(including children who are temporarily living outside of the household for
school, military service or other similar situation), and a relative of the
person who lives in such person's household.

         High Quality Short-Term Debt Instrument means any instrument that has a
maturity at issuance of less than 366 days and that is rated in one of the two
highest rating categories by a nationally recognized statistical rating
organization (e.g., Moody's Investors Service).



                                      A-2


         Index Eligible Company means a company that (i) is represented in an
Underlying Index of an Affiliated ETF, (ii) is eligible for inclusion in an
Underlying Index of an Affiliated ETF, (iii) has been represented in an
Underlying Index of an Affiliated ETF within the past two quarters, or (iv) in
the judgment of the Index Staff and based on the criteria used by the Index
Administrator to determine the composition of each Underlying Index, could
reasonably be expected to be eligible for inclusion in an Underlying Index of an
Affiliated ETF within the next two quarters.

         Index Staff means those officers and employees of the Advisor or an
Affiliated ETF, or any affiliated person of the Advisor or an Affiliated ETF,
who have been appointed by the Advisor to assist the Index Administrator of an
Affiliated ETF in the performance of its duties.

         IPO (i.e., initial public offering) means an offering of securities
registered under the Securities Act of 1933 the issuer of which, immediately
before the registration, was not subject to the reporting requirements of
Sections 13 or 15(d) of the Securities Exchange Act of 1934.

         Investment Personnel means (i) any employee of the Advisor (or of any
company in a control relationship to the Advisor) who, in connection with his or
her regular functions or duties, makes or participates in making recommendations
regarding the purchase or sale of Securities for a Fund, (ii) any natural person
who controls the Advisor and who obtains information concerning recommendations
made regarding the purchase or sale of Securities by a Fund.

         Limited Offering means an offering that is exempt from registration
under the Securities Act of 1933 pursuant to Section 4(2), Section 4(6), Rule
504, Rule 505 or Rule 506 (e.g., private placements).

         Purchase or sale of a Security includes, among other things, the
writing of an option to purchase or sell a security. The purchase or sale of a
security in an account in which a person is deemed to have a Beneficial
Ownership or a Beneficial Interest is deemed to be a purchase or sale of a
Security by such a person.

         Reconstitution Month means any calendar month during which the Index
Administrator is reconstituting an Underlying Index of an Affiliated ETF.

         Reportable Fund means any investment companies other than money market
funds that are registered under the Investment Company Act for which the Advisor
serves as an investment adviser or whose investment adviser or principal
underwriter controls the Advisor, is controlled by the Advisor, or is under
common control with the Advisor. A Reportable Fund includes registered
investment companies that are sub-advised by the Advisor or its affiliates

         Security or Securities means any note, stock, treasury stock, security
future, bond, debenture, evidence of indebtedness, certificate of interest or
participation in any profit-sharing agreement, collateral-trust certificate,
preorganization certificate or subscription, transferable share, investment
contract, voting-trust certificate, certificate of deposit for a security,
fractional undivided interest in oil, gas, or other mineral rights, any put,
call, straddle, option, or privilege on any security (including a certificate of
deposit) or on any group or index of securities (including any interest therein
or based on the value thereof), or any put, call, straddle, option, or


                                      A-3



privilege entered into on a national securities exchange relating to foreign
currency, or, in general, any interest or instrument commonly known as a
"security", or any certificate of interest or participation in, temporary or
interim certificate for, receipt for, guarantee of, or warrant or right to
subscribe to or purchase any of the foregoing.

         A Security held or to be acquired by a Fund or being considered for
purchase or sale means: (i) any security that within the most recent 15 days is
or has been held by a Fund or is being or has been considered by the Advisor for
purchase by a Fund and (ii) any option to purchase or sell, and any security
convertible into or exchangeable for, a security.



                                      A-4




                                                                  Exhibit (p)(2)

                                   APPENDIX B

              XShares Advisors LLC Family of Exchange-Traded Funds
              ----------------------------------------------------

Affiliated ETFs
---------------

         HealthShares(TM), Inc.

         HealthShares(TM) Asian Health Exchange-Traded Fund HealthShares(TM)
         Autoimmune-Inflammation Exchange-Traded Fund HealthShares(TM) Cancer
         Exchange-Traded Fund HealthShares(TM) Cardio Devices Exchange-Traded
         Fund HealthShares(TM) Cardiology Exchange-Traded Fund HealthShares(TM)
         Dermatology and Wound Care Exchange-Traded Fund HealthShares(TM)
         Diagnostics Exchange-Traded Fund HealthShares(TM) Emerging Cancer
         Exchange-Traded Fund HealthShares(TM) Enabling Technologies
         Exchange-Traded Fund HealthShares(TM) European Drugs Exchange-Traded
         Fund HealthShares(TM) European Medical Products and Devices
         Exchange-Traded Fund HealthShares(TM) GI/Gender Health Exchange-Traded
         Fund HealthShares(TM) Infectious Disease Exchange-Traded Fund
         HealthShares(TM) Metabolic-Endocrine Disorders Exchange-Traded Fund
         HealthShares(TM) Neuroscience Exchange-Traded Fund HealthShares(TM)
         Ophthalmology Exchange-Traded Fund HealthShares(TM) Orthopedic Repair
         Exchange-Traded Fund HealthShares(TM) Patient Care Services
         Exchange-Traded Fund HealthShares(TM) Respiratory/Pulmonary
         Exchange-Traded Fund HealthShares(TM) Composite Exchange-Traded Fund


Un-Affiliated ETFs
------------------

         TDAX Funds, Inc.

         TDAX Independence 2010 Exchange-Traded Fund
         TDAX Independence 2020 Exchange-Traded Fund
         TDAX Independence 2030 Exchange-Traded Fund
         TDAX Independence 2040 Exchange-Traded Fund
         TDAX Independence In-Target Exchange-Traded Fund



                                      B-1




                                                                  Exhibit (p)(2)

                                   APPENDIX C

                        Personal Trade Request Form (PTR)
                        ---------------------------------

         The following form must be completed by you in order to request
pre-clearance of a personal securities transaction that requires pre-clearance
under the Code of Ethics of either HealthShares(TM), Inc., TDAX Funds, Inc. or
XShares Advisors LLC. By signing below, you certify that you are not aware of
any trades for any Funds in this Security over the past 15 days and that you are
also not aware that the Advisor is planning on engaging in a trade involving
this Security over the next 15 days. You further certify that you do not have
any confidential or inside information relating to the issuer of this Security.
This Form must be submitted to the appropriate Company firm's Chief Compliance
Officer. You may not complete this trade until you receive approval from the
Chief Compliance Officer. If approved, the approval is good for the day it is
given and the following business day. If your trade is not completed within that
time, you must submit a new request.

Name: __________________

Social Security Number: _____________

Investment Information
Issuer and ticker symbol: _____________________


Nature of Equity Investments (please circle):

                  Common Stock      Preferred Stock

                  Number of Shares:  __________

Nature of Fixed Income Investments:

                  Describe instrument :__________

                  Principal amount of trade:  __________

Transaction Information
Transaction Type (please circle):

         Purchase        Sale       Short Sale

Estimated Trade Date:
                      ----------------------
Estimated Price:
                 ---------------------------
Broker/Dealer:
               -----------------------------
Is the proposed investment an IPO?                           Y       N
Is the proposed investment a Limited Offering?               Y       N

                  Signature:_____________________

                  Date:_______________________


                                      C-1



                                                 Chief Compliance Officer Action

                                                 Approved:________________

                                                 Not Approved:_____________



                                      C-2




                                                                  Exhibit (p)(2)


                                   APPENDIX D

                       Initial and Annual Holdings Reports
                       -----------------------------------

To: The Chief Compliance Officer

HealthShares(TM), Inc
TDAX Funds, Inc.
XShares Advisors LLC


         As of _____________, a date within 45 calendar days of this submission,
I had direct or indirect beneficial ownership interest in the Securities listed
below which are required to be reported pursuant to the Code of Ethics of
HealthShares(TM), Inc., TDAX Funds, Inc. or XShares Advisors LLC.

Name of Reporting Person:

If Initial Report, Date Person Became Subject to the Code:

Information in Report Dated as of:

Date Report Submitted:

Securities Holdings:

Check here if, in lieu of completing the chart below, you have attached all of
your most recent investment account statements:_______, Number of statements
attached:__________




                                                                                          Principal Amount,
                                                                                          Maturity Date and
                                 Ticker Symbol                                            Interest Rate (if
    Title of Security            or CUSIP                     Number of Shares            applicable)
--------------------------       -----------------            ----------------------      -----------------------------------







         The name of all brokers, dealers or banks with whom I maintain an
account in which my securities are held for my direct or indirect benefit are as
follows




             Name of Broker, Dealer or Bank                            Name(s) on and Type of Account
             ------------------------------                            ------------------------------






                                      D-1





         I certify that I have included on this report all securities holdings
and accounts required to be reported pursuant to the Code of Ethics and that the
information contained herein is accurate an complete.


   Signature:__________________                   Date:____________________




                                      D-2




                                                                  Exhibit (p)(2)


                                   APPENDIX E

                                Quarterly Report
                                ----------------

To: The Chief Compliance Officer

         HealthShares(TM), Inc.
         TDAX Funds, Inc.
         XShares Advisors LLC

         I hereby certify that I have engaged in the following personal
securities transactions which are required to be reported under the Code of
Ethics of HealthShares(TM), Inc., TDAX Funds, Inc. or XShares Advisors LLC
during the calendar quarter indicated below. I hereby submit this report within
30 days after the end of that quarter. (Note: you do not need to complete this
report if all of your trading confirmations and account statements are already
being delivered to the Chief Compliance Officer)

Name of Reporting Person:

Calendar Quarter Ended:

Date Report Submitted:

Securities Transactions

         Please provide the following information for any reportable
transactions during the quarter:




                                                                          Principal
                                                                          Amount,                      Name of
                                                                          Maturity                     Broker,
                                                                          Date and                     Dealer or
                               Ticker                                     Interest                     Bank
Date of          Title of      Symbol or       Number                     Rate (if       Type of       Effecting
Transaction      Security      CUSIP           of Shares      Price       applicable)    Transaction   Transaction
--------------   ------------  ------------    -------------  ----------  -------------  ------------- ----------------------------







         I have established the following new accounts with brokers, dealers or
banks in which my securities are held for my direct or indirect benefit.




  Name of Broker, Dealer or Bank           Date Account was Established           Name(s) on and Type of Account
----------------------------------         -------------------------------        -------------------------------------------------







                                      E-1





         I certify that I have included on this report all securities
transactions and accounts required to be reported pursuant to the Code of
Ethics.


Signature:___________________                        Date:___________________




                                      E-2



                                                                  Exhibit (p)(2)



                                   APPENDIX F

                                 Acknowledgment
                                 --------------

To:  Chief Compliance Officer

         HealthShares(TM), Inc.
         TDAX Funds, Inc.
         XShares Advisors LLC

Re:  Acknowledgment of Code of Ethics

         Initial Acknowledgment: Please check here if this is an initial
acknowledgment.                                                             |_|

         I certify that (1) I have received, read and understand this Code of
Ethics, (2) I am aware that I am subject to the provisions of this Code, (3) I
will comply with this Code, (4) I will report all holdings, transactions and
accounts that I am required to report pursuant to this Code.

         Annual Acknowledgment: Please check here if this is an annual
acknowledgment.                                                             |_|

         I certify that (1) I have received, read and understand this Code of
Ethics, (2) I am aware that I am subject to the provisions of this Code, (3) I
have complied with this Code at all times during the previous calendar year, and
(4) I have, during the previous calendar year, reported all holdings,
transactions and accounts that I am required to report pursuant to this Code.

Name (print):___________________________

Position:_______________________________

Signature:______________________________

Date Submitted:_________________________



                                      F-1








                                                                  Exhibit (p)(3)



                      AMERIVEST INVESTMENT MANAGEMENT, LLC



                       Code of Business Conduct and Ethics


                            Adopted January 31, 2005
                                  (Revised TBD)







                      AMERIVEST INVESTMENT MANAGEMENT, LLC

                       Code of Business Conduct and Ethics



Index:

I.   Purpose and Background

II.  Applicability

III. Standards of Business Conduct and Ethics

     A.   Honest and Ethical Conduct

     B.   Compliance with Laws, Rules and Regulations

     C.   Full, Fair, Accurate, Timely and Understandable Public Disclosure

IV.  Additional Standards and Policies

     A.   Holdings Reports

     B.   Trading of Securities

     C.   Sub-Advisory Activities

     D.   Protection of Intellectual Property

     E.   Protection of Confidential Information

     F.   Corporate Opportunity

     G.   Fair Dealing

     H.   Equal Employment Opportunity and Harassment

     I.   Protection and Use of Company Assets

     J.   Record Keeping

V.   Reporting Violations

     A.   Reporting Violations of the Code

     B.   Anonymous Reporting of Violations

     C.   Anti-Retaliation

VI. Compliance and Accountability

     Appendix A, Defined Terms
     Appendix B, Holdings and Transaction Reports


                                       2




                      AMERIVEST INVESTMENT MANAGEMENT, LLC

                       Code of Business Conduct and Ethics


I.       Purpose and Background

         This Code of Business Conduct and Ethics (this "Code") is designed (a)
to promote (i) honest and ethical conduct, (ii) compliance with applicable laws,
rules and regulations, and (iii) full, fair, accurate, timely and understandable
disclosure in the reports and documents that AMERIVEST Investment Management,
LLC (herein called "AMERIVEST" or the "Company") files with or submits to the
Securities and Exchange Commission (the "SEC") and in other public
communications made by AMERIVEST (collectively, the "Public Disclosures"), (b)
to deter wrongdoing, and (c) to help foster an atmosphere of ethical and prudent
conduct throughout the Company. This Code outlines the broad principles of legal
and ethical business conduct embraced by AMERIVEST. It is not a complete list of
legal or ethical standards applicable to the managers, officers or associates
(i.e. employees) of the Company.

         In addition to this Code, (i) the Company has adopted policies
addressing specific issues, including, but not limited to, those expressed or
referenced in the Company's Supervisory Procedures Manual, some of which are
cross-referenced in this Code, and (ii) the Company's managers, officers and
associates are subject to the policies and procedures of the Company's ultimate
Parent, TD AMERITRADE Holding Corporation ("TDA") and its other broker dealer
subsidiaries, some of which also are cross-referenced in this Code. These
policies are not part of this Code but they are important and you are required
to familiarize yourself and comply with such policies.


II.      Applicability

This Code applies to all managers, officers and associates of the Company as
well as any other persons who are subject to its supervision and control. Such
persons fall within the category of "Supervised Persons" as defined in Section
202(a)(25) of the Investment Advisers Act of 1940 (the "Advisers Act") and are
herein called "Supervised Persons". Those Supervised Persons of the Company who
may have access to non-public information relating to the Company's advisory
activities would also be deemed to be "Access Persons" under Rule 204A-1 and are
herein called "Access Persons". Generally, Supervised Persons of AMERIVEST will
not be considered Access Persons because of the limited business model of
AMERIVEST, which deals exclusively with asset allocation models involving
exchange-traded funds ("ETFs") and cash investment vehicles such as money market
funds and does not involve any individual securities recommendations or
discretionary account management by AMERIVEST or its associates. This Code
constitutes the Code of Ethics required of all investment advisors registered
with the SEC pursuant to Rule 204A-1 under the Advisers Act. On an annual basis
the Company is required to provide each Supervised Person with a copy of this
Code and any amendments thereto. Supervised Persons will be required to
acknowledge receipt of this Code and any amendments in a manner selected by the
Company.


                                       3


         The Code also should be provided to and generally followed by the
Company's agents and representatives, including contract or temporary personnel
and outside consultants.




III.     Standards of Business Conduct and Ethics

         A.       Honest and Ethical Conduct

         All Supervised Persons shall act in accordance with high standards of
honest and ethical conduct, including taking appropriate actions to permit and
facilitate the ethical handling and resolution of actual or apparent conflicts
of interest between personal and professional relationships. These standards are
premised on fundamental principles of openness, integrity, honesty and trust.
While these standards do not prohibit any action that is in compliance with the
Advisers Act and the federal securities laws, the Company places a high value on
honest and ethical conduct and expects Supervised Persons to act accordingly.

         B.       Compliance with Laws, Rules and Regulations

         In performing his or her duties, Supervised Persons shall take
appropriate action within his or her areas of responsibility to cause the
Company to comply, with applicable governmental laws, rules, and regulations,
including the Advisers Act and the federal securities laws. In particular, each
Supervised Person shall be mindful at all times of the fiduciary duty the
Company has to its clients under the Advisers Act. In short, that duty requires
that the Company act in the best interest of its clients. This includes the duty
to exercise the utmost good faith in dealings with clients, to make full
disclosure of all material facts and to employ reasonable care to avoid
misleading clients.

         C.       Full, Fair, Accurate, Timely and Understandable Public
                  Disclosure

         In performing his or her duties, Supervised Persons who are responsible
for or otherwise involved in the process of preparation or review of AMERIVEST's
Public Disclosures shall take appropriate action within his or her areas of
responsibility to cause the Company's public disclosures to be full, fair,
accurate, timely, and understandable.

         Each Supervised Persons who is called upon to provide information in
connection with the Public Disclosure process shall take appropriate and prompt
action to provide full and accurate information to those Supervised Persons who
are responsible for or otherwise involved in the process of preparation or
review of the Company's Public Disclosures.




                                       4


IV.      Additional Standards and Policies

         A.       Holdings and Transaction Reports

         SEC Rule 204A-1(b)(1) requires each Access Person to complete an
initial holdings report within 10 days of becoming an Access Person and at least
once a year thereafter. Furthermore, SEC Rule 204A-1(b)(2) requires Access
Persons to submit quarterly securities transactions reports. The quarterly
securities transactions reports are due no later than 30 days after the close of
the calendar quarter.

         AMERIVEST will rely on the duplicate information which is contained in
trade confirmations and/or account statements that TD AMERITRADE, Inc. ("TD
AMERITRADE") has on file to satisfy the initial holdings report and transaction
report requirements since AMERIVEST associates are also associated persons of TD
AMERITRADE, they are subject to similar holding and transaction reporting
requirements, copies of which are set forth in the TDA, TD AMERITRADE or TD
AMERITRADE Clearing, Inc WSPs including Appendix I, Associate Trading Policies
and Procedures (Appendix B), the requirements include procedures covering:
               o   Securities Accounts
               o   Securities Account Transactions
               o   Securities Transactions for Personal and Family-Related
                   Accounts
               o   Private Securities Transactions

         If a new access person has not been an associate of TD AMERITRADE for
at least three months and therefore TD AMERITRADE does not have the duplicate
confirmations or statements on file then, the Access Person must submit a
holdings report to the Chief Compliance Officer or his designee no later than 10
days after he/she becomes an Access Person. The information in the holdings
report must be current as of a date no more than 45 days prior to the dates the
person becomes an Access Person and must contain, at a minimum:
         o   The title and type of security, and as applicable the exchange
             ticker symbol or CUSIP number, number of shares, and principal
             amount of each reportable security in which the access person has
             any direct or indirect beneficial ownership;
         o   The name of any broker, dealer or bank with which the Access Person
             maintains an account in which any securities are held for the
             Access Person's direct or indirect benefit; and
         o   The date the Access Person submits the report.

To satisfy the annual holdings report requirement on an annual basis, Access
Persons will be required to verify that all brokerage accounts beneficially
owned or controlled by them or a member of their immediate household are held
with TD AMERITRADE in office codes designated for associate accounts and
accounts held outside the designated TD AMERITRADE office codes (with external
firms) have been disclosed and duplicate confirmations and statements are being
provided to the Compliance Department.

The review of Access Persons' holding and transaction reports by the Chief
Compliance Officer or his designee will focus primarily on whether the Access
Person followed the required advance approval procedures as described below
because the limited business model of AMERIVEST deals exclusively with the asset
allocation models involving exchange-traded funds ("ETFs") and


                                       5



cash investment vehicles such as money market funds and does not involve any
specific securities recommendations or discretionary account management by
AMERIVEST or its associates.



         B.       Trading of Securities

         Supervised Persons must not buy or sell securities on the basis of
material nonpublic information relating to the Company's ultimate parent, TDA,
or any other issuer of securities or communicate material, non-public
information to another person who buys or sells securities on the basis of the
information. Supervised Persons must periodically report (not less than
annually) their personal securities transactions and holdings to the Company's
Chief Compliance Officer and the Company must review such reports. Supervised
Persons should refer to AMERIVEST's Supervisory Procedures Manual and to TDA's
Trading Policies for more detailed information about these requirements.

         Rule 204A-1 under the Advisors Act requires that Access Persons be
subject to advance approval requirements in two circumstances: (i) investing in
an initial public offering ("IPO") and (ii) investing in a private placement of
securities. These requirements stem from concern that an Access Person's
participation in either type of transaction would raise questions as to whether
the investment opportunity should be offered instead to the advisor or its
parent or its clients and whether the person might be receiving a personal
benefit for directing business. AMERIVEST goes further than required as to IPOs,
barring Access Persons from participating in them at all. AMERIVEST requires
pre-clearance as to Access Persons investing in any private placement of
securities. Any such pre-clearance request should be directed to the Company's
Chief Compliance Officer.

         C.       Sub-Advisory Activities

          As a Sub-Advisor for TDAX Funds, Inc., AMERIVEST will provide
oversight to include review of the portfolio of securities of each Independence
Exchange Traded Fund in accordance with the terms of the Fund's Prospectus and
Statement of Additional Information, assistance in the resolution of any pricing
issues and assistance in the development of trading strategies. These functions
are assigned to the Director of Portfolios for AMERIVEST. The Director of
Portfolios for AMERIVEST is prohibited from disclosing or using any material
nonpublic information acquired through his employment and obligations with
regards to the TDAX Funds, except as appropriate in connection with the
rendering of services per the sub-advisory agreement. Persons under the
supervision of the Director of Portfolios are also subject to the prohibition.

         The Director of Portfolios and persons under his supervision are also
prohibited from buying or selling any securities that will be added or deleted
from any Independence Exchange Traded Fund or Index. AMERIVEST's Supervisory
Procedures Manual contains detailed information about these requirements.

         In addition, to the extent that any AMERIVEST personnel has material
nonpublic information in regards to an impending purchase or sale of securities
in an Independence


                                       6



Exchange Traded Fund or related Index, AMERIVEST personnel may not use or
disseminate this information to any persons particularly when recommending
securities to clients. A violation of this requirement may result in
disciplinary action, up to and including termination of employment.

         D.       Protection of Intellectual Property

         It is the Company's policy to protect the intellectual property
developed, licensed or otherwise owned by the Company. Supervised Persons should
refer to TDA's Intellectual Property Protection Policy.

         E.       Protection of Confidential Information

         It is the Company's policy to protect the following information from
unauthorized disclosure or use:

     o   Confidential information about the Company and its clients, including
         material nonpublic information about the Company's securities
         recommendations, client securities holdings and transactions, business,
         financial, technical, research and development, personnel and personal
         information; and

     o   Any information that the Company obtains from another company or person
         in confidence under a nondisclosure agreement.

Company policy also involves taking reasonable measures to establish proprietary
rights to trade secrets and to avoid infringement of others' intellectual
property rights. Supervised Persons should refer to TDA's Confidential
Information Protection Policy.

         F.       Corporate Opportunity

         Each of the Supervised Persons owes a duty to the Company to advance
its legitimate interests when the opportunity to do so arises. A Supervised
Person, may not compete against the Company or take for himself or herself, or
direct to a third party an opportunity that would be an appropriate opportunity
for the Company that is discovered in the course of such person's service to or
employment by the Company or through the use of the Company's property or
information, unless the Company has already been offered the opportunity and
turned it down.

         G.       Fair Dealing

         It is the Company's policy to engage in honest business competition. It
does not seek competitive advantages through illegal or unethical business
practices. In furtherance of this policy, each of the Supervised Persons should
deal fairly with all other Supervised Persons and the clients, service
providers, and suppliers of the Company.

         No Supervised Person should take unfair advantage of anyone through
manipulation, concealment, abuse of privileged information, misrepresentations
of material facts, or any unfair dealing practice.


                                       7



         Fair dealing requires that the Company deal with competitors at arm's
length. For example, agreements to restrain trade by setting prices with
competitors violate antitrust laws designed to encourage competition. Fair
dealing also requires that Supervised Persons not make illegal payments--which
could include gifts, favors, entertainment and cash--to government officials.
Each of the Supervised Persons must comply with the Foreign Corrupt Practices
Act, which generally prohibits giving anything of value, directly or indirectly,
to foreign government officials or political candidates in order to obtain or
retain business. The purpose of business entertainment and gifts in a commercial
setting is to create good will and sound working relationships, not to gain
unfair advantage with customers. Supervised Persons should refer to the
Company's Gifts and Gratuities Policy, which is the one set forth in the TDA
Associate Handbook.

         H.       Equal Employment Opportunity and Harassment

         It is the Company's policy to provide equal employment opportunities in
all aspects of employment and the Company prohibits discrimination of any kind.
The Company expects each of the Supervised Persons to act in a manner consistent
with its equal employment opportunity policy.

         The Company is committed to a work environment which fosters teamwork
and cooperation and in which all individuals are treated with respect and
dignity. Accordingly, it is the continuing policy of the Company to ensure that
harassment will not be tolerated. This includes associates, applicants for
employment, temporary workers, contractors, vendors, service providers, clients
or others with whom associates may interact in the workplace.

         Supervised Persons again should refer to the TDA Associate Handbook,
which provides additional information regarding the Company's equal employment
opportunity, harassment, and other policies.
         I.       Protection and Use of Company Assets

         Each of the Supervised Persons should protect the assets of the
Company, including records and confidential information, and ensure their
efficient use. All assets of the Company should be used for legitimate business
purposes only. In addition, Supervised Persons should refer to the TD AMERITRADE
Delegation of Authority Policy, which provides controls relating to the approval
of transactions, expenditures and other disposition of assets.

         J.       Record Keeping

         The Company requires honest and accurate recording and reporting of
information in order to make responsible business decisions and to comply with
applicable laws and regulations. All of the Company's books, records, accounts
and financial statements must be maintained in reasonable detail, must
accurately reflect the Company's transactions and must conform both to
applicable legal requirements and to the Company's system of internal controls.
Company records are maintained in accordance with the policies of the Company's
Parent, TDA its affiliated broker dealers pursuant to the Business Services
Agreement between TD AMERITRADE Services Company, Inc and AMERIVEST and the
records maintained are subject to the TDA Master Record Retention Schedule.


                                       8



         It is the Company's policy to retain all records and documents
necessary for the conduct of its business and as required by applicable laws,
rules and regulations. Records and documents should be retained according to the
Company's record retention policies. Records and documents should not be
destroyed or discarded if they are the subject of an investigation (whether
internal or by a governmental authority or self-regulatory organization) or a
judicial, regulatory, administrative or other proceeding, including, but not
limited to, records or documents that are requested in a subpoena or other
information request in an investigation or proceeding. Questions regarding
record and document retention in such situations should be addressed to the
Company's Chief Compliance Officer.


V.       Reporting Violations


         A.       Reporting Violations of the Code

         Each of the Supervised Persons shall promptly provide AMERIVEST's Chief
Compliance Officer with information concerning conduct such Supervised Person
reasonably believes to constitute a violation of this Code or a material
violation by the Company or its directors, officers or associates, of the
securities laws, rules or regulations and other laws, rules or regulations
applicable to the Company. Alternatively, Supervised Persons may provide such
information anonymously in accordance with subsection B below.

         Any Supervised Person having a concern or complaint regarding
questionable matters of the Company is encouraged to speak with his or her
manager or submit the concern or complaint to AMERIVEST's Chief Compliance
Officer. Such concerns or complaints may be submitted anonymously in accordance
with subsection B below, in which case they will be treated as confidential
subject to applicable law, rules and regulations.



         B.       B.       Anonymous Reporting of Violations

         Any violation of this Code and any violation by the Company or a
Supervised Person of the securities laws, rules or regulations, other laws,
rules or regulations applicable to the Company or concerns or complaints
regarding questionable accounting or auditing matters of the Company may be
reported anonymously via TDA's hotline provider, The Network, by calling
1-877-888-0002.


                                       9



         C.       Anti-Retaliation

         Supervised Persons are encouraged to talk to supervisors, managers or
other appropriate personnel about observed possible violations of this Code or
laws, rules, or regulations. It is the policy of the Company not to permit
retaliation for good faith reports of misconduct by others and to promptly
investigate reports received. The Company strives to ensure that all of its
associates can work in an environment free from retaliation. Retaliation against
an individual for reporting violations or participating in investigations
relating to perceived violations of Company policies or this Code, or laws,
rules or regulations is a violation of this Code and will subject the offender
to disciplinary action, up to and including termination. False and malicious
complaints of retaliation may be the subject of appropriate disciplinary action
as well. This does not include any complaints made in good faith, even if it is
determined that unlawful retaliation did not occur.

         Supervised Persons who believe that they have been the victims of
unlawful retaliation resulting from their lawful act of providing information
to, or assisting an investigation performed by, the Company or any regulatory or
government agency should immediately report their concerns to TD AMERITRADE's
Human Resource Department or anonymously as provided in subsection B above. Any
reported allegations of retaliation will be investigated promptly. The
investigation may include individual interviews with the persons involved and,
where necessary, with individuals who may have observed the alleged conduct or
may have other relevant knowledge. Each of the Supervised Persons is expected to
cooperate in connection with the investigation. Confidentiality will be
maintained throughout the investigatory process to the extent consistent with
the need to conduct an adequate investigation and, where appropriate, take
corrective action.


VI.      Compliance and Accountability

         With respect to all Supervised Persons, the Company's Chief Compliance
Officer has the authority to assess compliance with this Code and to report any
deficiencies to the Company's managers and/or to TD AMERITRADE's General Counsel
and its Chief Administrative Officer. In addition, TD AMERITRADE's General
Counsel and its Chief Administrative Officer each has the authority to (i)
assess compliance with this Code, and report violations of this Code to the
Audit Committee of TD AMERITRADE's Board of Directors to the extent either
determines appropriate, and (ii) based upon the relevant facts and
circumstances, determine appropriate action or recommend to the Audit Committee
appropriate action.

         A violation of this Code may result in disciplinary action, up to and
including termination of employment.


                                       10



                       Code of Business Conduct and Ethics


Appendix, Defined Terms

The terms below are defined in the sections indicated:

"Access Persons"                    Section II

"Advisors Act":                     Section II

"Ameritrade":                       Section I

"Code":                             Section I

"Company":                          Section I

"Supervised Persons":               Section II

"Public Disclosures":               Section I

"SEC":                              Section I








Appendix B, Holdings and Transaction Reports


TD AMERITRADE, Inc. Written Supervisory Procedures Manual:
http://athena.ameritrade.com/uploads/p_compliance/86528_1_2006-09-01_
Written%20Supervisory%20Procedures%20Manual_BD%205633.pdf


Appendix I, Trading Policies and Procedures:
http://athena.ameritrade.com/uploads/p_compliance/86535_Appendix%20I%20-
%20TRADING%20POLICIES%20AND%20PROCEDURES.pdf





                                                                  Exhibit (p)(4)


EXHIBIT D     CODE OF ETHICS

                           Revised as of January 2006



                                 CODE OF ETHICS

                                       FOR

                              BNY ASSET MANAGEMENT
                             THE BANK OF NEW YORK*
                                     ("BNY")

                                       AS


                               INVESTMENT ADVISER



___________________________________
* Also applicable to employees of Estabrook Capital Management LLC to the extent
             that they are access persons of the BNY Hamilton Funds





                                  INTRODUCTION

This Investment Company Code of Ethics is adopted pursuant to Rule 17j-1 under
the Investment Company Act and Rule 204A-1 under the Investment Advisers Act.
Adherence to the Code of Ethics and the related restrictions on personal
investing is considered a basic condition for providing advisory and related
services to registered investment companies for which BNY Asset Management
serves as investment advisor (collectively "RICs"). If employees have any doubts
as to the propriety of any activity, they should consult with one of the BNY
Asset Management Surveillance Officers. The Code of Ethics is designed to
prevent violations of all applicable federal securities laws,

This Code of Ethics is in addition to the Code of Ethics for each RIC.

I.       APPLICABILITY OF CODE OF ETHICS

This Investment Company Code of Ethics shall apply to any person who meets the
definition of "access person," as defined in Rule 17j-1 and Rule 204A-1, with
respect to the RICs.


II.      DEFINITIONS

(a)      "Access person" is defined by the Rules to include any BNY employee:

         (1) who makes any recommendation, who participates in determining which
         recommendation will be made, or whose principal functions or duties
         relate to the determination of which recommendation will be made by BNY
         on behalf of any RIC or

         (2) who, in connection with his or her duties, obtains any information
         concerning recommendations being made by BNY on behalf of any RIC or
         who makes, participates in or obtains information regarding the
         purchase or sale of any securities by any RIC.

         This definition includes portfolio managers, analysts and traders
employed by the Bank who serve RICs as an investment advisor. There may be
additional employees who fall within the definition of access person who,
because of the nature of their position, possess information regarding the
securities that RICs will purchase or sell. A comprehensive list of all access
persons will be compiled and maintained by the BNY Asset Management Surveillance
Officers. All access persons shall be notified of their obligations under this
Code of Ethics.

(b) "Beneficial ownership" shall be interpreted in the same manner as the
definition of "beneficial owner" set forth in Rule 16a-1(a)(2) under the
Securities Exchange Act of 1934 (the "Exchange Act") and shall refer to any
security in which the access person has or acquires, directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise, a
direct or indirect pecuniary interest (other than a pecuniary interest arising
from compensation for services rendered) (see Exhibit A annexed hereto). For
example, in addition to a person's own account, beneficial ownership encompasses
securities held in the name of a spouse or equivalent domestic partner, minor
children, a relative sharing a


                                                                               1



home with such person or certain trusts under which such person or a related
party is a beneficiary. Please note, however, that this list provides only a few
of the more common examples and that Exhibit A should be carefully reviewed to
identify other potential instances of beneficial ownership.

(c) "Index Fund Securities" are securities being purchased or sold by a RIC
index fund that purchases and sells securities pursuant to a pre-determined
formula.

(d) "Initial Public Offering" means an offering of securities registered under
the Securities Act of 1933 (the "Securities Act"), the issuer of which
immediately before registration, was not subject to the reporting requirements
of the Sections 13 or 15(d) of the Exchange Act.

(e) "Privately placed securities" means securities which are purchased in an
offering that is exempt from registration under the Securities Act pursuant to
sections 4(2) or 4(6) or pursuant to rules 504, 505 or 506 thereunder.

III. TEXT OF RULE 17J-1(b) OF THE INVESTMENT COMPANY ACT

Rule 17j-1(b) prohibits access persons from engaging in certain specified
activity. The text of Rule 17j-1(b) is attached as Exhibit B. All access persons
are required to familiarize themselves with this Rule. No later than ten (10)
days after being designated as an access person, an access person shall be
required to submit the attached Acknowledgment. All access persons shall be
required to submit such Acknowledgment on an annual basis by January 30th of
each year. Such Acknowledgment shall be submitted via the Personal Trading
Assistant ("PTA") system maintained by the BNY Asset Management Surveillance
Officers.

IV.      RESTRICTIONS ON PERSONAL INVESTING ACTIVITIES

Investment activities of all access persons must remain within the parameters
set forth below:

(a)      Prohibited Purchases and Sales - General.

         (1) Except for "Exempted Transactions" specified in Section VI below,
         no access person shall purchase or sell, directly or indirectly, any
         security in which he has, or by reason of such transaction acquires,
         any direct or indirect beneficial ownership and which to his actual
         knowledge at the time of such purchase or sale (i) is being considered
         for purchase or sale by any RIC for which such person is an access
         person or (ii) is being purchased or sold by any RIC for which such
         person is an access person. This sub-section shall not apply to
         transactions in Index Fund Securities or to any securities transaction
         (A) for an account for which the access person is a discretionary
         investment advisor provided that such access person has no direct or
         indirect beneficial ownership interest in such account or (B) for a
         trust unless the trustee is a "beneficial owner of a trust" as such
         term is defined in Exhibit A annexed hereto.



                                                                               2




         (2) No access person shall reveal to any other person (except in the
         normal course of his or her duties on behalf of a RIC for which such
         person is an access person) any information regarding securities
         transactions by such RIC or consideration by such RIC of any such
         securities transaction.

         (3) No access person shall recommend any securities transaction by any
         RIC without having disclosed his or her interest, if any, in such
         securities or the issuer thereof, including without limitation (i) his
         or her direct or indirect beneficial ownership of any securities of
         such issuer; (ii) any contemplated transactions by such person in such
         securities; (iii) any position with such issuer or its affiliates; and
         (iv) any present or proposed business relationship between such issuer
         or its affiliates, on the one hand, and such person or any party in
         which such person has a significant interest, on the other; provided,
         however, that in the event the interest of such access person in such
         securities or issuer is not material to his or her personal net worth
         and any contemplated transaction by such person in such securities
         cannot reasonably be expected to have a material adverse effect on any
         such transaction by the RIC for which such person is an access person
         or on the market for the securities generally, such access person shall
         not be required to disclose his or her interest in the securities or
         issuer thereof in connection with any such recommendation.

(b) Prohibition on Acquiring Securities in an Initial Public Offering ("IPO")
Until After the Initial Offering has been Completed. Purchases of IPO's by
access persons pose two potential conflicts of interest. First, an opportunity
for access persons to participate in a "hot issue" or other attractive IPO is
not likely to be viewed as a random event. It may also create the impression
that future investment decisions for a RIC were not pursued solely because they
were in the best interest of the RIC. Second, the realization of any short-term
profits may create at least the appearance that an investment opportunity that
should have been available to the RIC was diverted to the personal benefit of an
individual employee. BNY believes that prohibiting the purchase of a security in
an IPO until after the IPO has been completed will reduce these potential
conflicts. After the IPO is completed, transactions in securities issued in the
IPO are subject to the restrictions contained in this Investment Company Code of
Ethics.

(c) Blackout Periods for Trading in the Same Security as a RIC. Other than
transactions in Index Fund Securities, on a day during which any RIC has a
pending "buy" or "sell" order in a security, all access persons are prohibited
from executing a securities transaction in such security or related derivative
security until such order is executed or withdrawn by such RIC or RICs.
Additionally, other than transactions in Index Fund Securities, portfolio
managers with respect to the RIC that he or she manages are prohibited from
buying or selling a security within seven (7) calendar days before and after the
RIC that he or she manages trades in that security. The blackout period after a
RIC trades is designed to allow dissipation of the market effect of the RIC's
trade before the portfolio manager trades. The blackout period before a RIC
trades is to negate the perception that the portfolio managers are front running
the RIC or otherwise deriving improper benefit from their knowledge.

(d) Pre-Clearance of Personal Securities Transactions. Access persons will be
required to pre-clear through one of the BNY Asset Management Surveillance
Officers all transactions in securities for which the access person has, or will
acquire as a result of such transaction, direct or indirect beneficial
ownership. This procedure will attempt to prevent a trade in which, for example,
a portfolio manager of one RIC intends to purchase securities, unaware that
another RIC in the same complex has an open order to purchase a significant
block of the same security. All access persons must submit a request to execute
a securities transaction, to, and obtain clearance for executing such
transaction from, one of the BNY Asset Management Surveillance Officers before
executing any securities transactions. The security will


                                                                               3



be checked against the system to attempt to determine whether or not the
purchase or sale would violate this Investment Company Code of Ethics.

V.       DISCLOSURE OF PERSONAL HOLDINGS AND TRANSACTIONS

(a) Initial and Annual Disclosure. No later than ten (10) days after becoming an
access person, an access person is required to submit to one of the BNY Asset
Management Surveillance Officers a listing of all securities that he or she
holds or over which he or she has any direct or indirect beneficial ownership.
Such report must be current as of a date no more than 45 days prior to the date
the person becomes an access person. This statement is to be updated by January
30th of each year by each access person. Such report must be current as of a
date no more than 45 days prior to the end of the preceding calendar year. This
disclosure will ensure that all non-exempt trades are being reported. The
initial and annual disclosure statements shall include information with respect
to those securities referenced in Section VI ("Exempted Transactions"). In lieu
of providing a listing of all securities, an access person may submit a list of
all securities or investment account statements (as attached hereto as Exhibit
C) along with the most recent statement for each referenced account. If an
access person provides a list of account statements, he or she shall also submit
a list of those investments that would not be reflected in traditional
broker-dealer accounts (e.g., private placements).

The information obtained from such list of securities or securities or
investment account statements shall be entered into the PTA system. All access
persons shall electronically certify that the list of brokerage accounts in the
Broker Account screen of the PTA system is accurate and complete. Such access
person shall also electronically certify that: (i) the Covered Securities listed
on the Holdings screen of the PTA system are the only ones in which such access
person has a direct or indirect beneficial ownership; (ii) the brokers, dealers,
and banks listed on the Holdings screen of the PTA system are the only ones that
such access person has established, or have been established, for such access
person or the related parties as referred to in this Code of Ethics, in which
securities (including those that may not be Covered Securities) are held for
such access person's direct or indirect benefit; and (iii) such access person
understands that report will be interpreted as a disclosure that such access
person has a direct or indirect beneficial ownership in the Covered Securities
listed on the Holdings screen.

(b) Monthly Disclosure - Duplicate Copies of Brokers' and Banks' Statements. All
access persons are required to direct their brokers and banks to supply to one
of the BNY Asset Management Surveillance Officers a duplicate copy of securities
or investment account statements for each account over which the access person
has direct or indirect beneficial ownership.(1) If the broker or bank statement
does not reflect any non-exempt securities transaction entered into by the
access person during the period covered by the statement submitted on behalf of
such access person, the access person must submit a Disclosure of Personal
Holdings Form reflecting such missing transactions and providing the following
additional information: date of transaction, nature of transaction, and the
price at which the transaction was effected. The transactions reported on the
brokers' or banks' statements (and Disclosure of Personal Holdings Form if
necessary) will be reviewed and compared against RIC transactions and the
pre-clearance forms. The brokerage and bank statements (and Disclosure of
Personal Holdings Form if necessary) will allow BNY Asset Management to ensure
the effectiveness of its compliance program.

(c) Quarterly Personal Securities Transactions Reports. Based on the list
provided in Section V(a) and the monthly broker/bank statements provided in
Section V(b), the PTA system shall generate quarterly personal securities
transaction reports. No later than ten (10) days following the end of each


____________________________________
(1) Please note that this requirement refers to bank statements for accounts
which hold securities (e.g., custody statements). It does not refer to standard
checking or savings accounts.


                                                                               4




calendar quarter, each access person shall be required to submit an electronic
certification to the effect that (i) such quarterly report lists all securities
transactions (regardless of size) for the previous calendar quarter (except
those "Exempted Transactions" described in Section VI(a), (b), (c) and (e)
hereof) in which such access person may be deemed to have had, or by reason of
such transaction acquired, any direct or indirect beneficial ownership interest
and (ii) other than the accounts for which statements were provided pursuant to
Section V(b), there were no accounts established by such access person in which
such access person held, or over which access person may be deemed to have had
any direct or indirect beneficial ownership of any securities during the
previous calendar quarter. For the avoidance of doubt, an access person's
obligation to disclose any new accounts shall apply even when the only
transactions in such accounts are "Exempted Transactions" as described in
Section VI.

(d) No Duplicative Reporting. If any access person is required to submit a
report or statement under another code of ethics or code of conduct relating to
a RIC and containing the same information as is required under this Investment
Company Code of Ethics, then only one such report or statement is required to be
submitted provided such report or statement is submitted to one of the BNY Asset
Management Surveillance Officers.

VI. EXEMPTED TRANSACTIONS

Except as noted, the following transactions are specifically exempted from
coverage by this Investment Company Code of Ethics:

         (a)      transactions in securities issued by the Government of the
                  United States;

         (b)      transactions in shares of open-ended investment companies
                  (other than exchange-traded funds, the BNY Hamilton funds and
                  any other funds for which The Bank of New York serves as
                  investment adviser);

         (c)      transactions involving bank certificates of deposit, bankers'
                  acceptance, commercial paper and high quality short-term debt
                  instruments (including repurchase agreements);

         (d)      transactions in securities which are not eligible for purchase
                  or sale by the RIC for which such access person is an access
                  person;

         (e)      transactions effected in any account over which the access
                  person has no direct or indirect influence or control (i.e.,
                  blind trust, discretionary account or trust managed by a third
                  party);

         (f)      transactions which are part of an dividend reinvestment plan;

         (g)      purchases effected upon the exercise of rights issued pro rata
                  to all holders of a class of its securities, to the extent
                  such rights were acquired from such an issuer, and sales of
                  such rights so acquired; and

         (h)      transactions in securities of The Bank of New York Company,
                  Inc. (provided, however, that all employees remain subject to
                  the Bank's Policy entitled "Purchase And Sale Of The Bank Of
                  New York Company, Inc. Securities").


                                                                               5




VII.     OVERSIGHT OF INVESTMENT COMPANY CODE OF ETHICS

The reports filed by access persons pursuant to this Investment Company Code of
Ethics will be reviewed on a monthly basis by one of the BNY Asset Management
Surveillance Officers and compared to transactions entered into by BNY Asset
Management on behalf of the RIC. Any transactions that are believed to be a
violation of this Investment Company Code of Ethics will be reported promptly to
BNY Asset Management's Chief Investment Officer and/or Director of Investment
Management.

The Chief Investment Officer and/or Director of Investment Management shall
consider reports made to him or her and shall make a determination as to whether
a violation of this Investment Company Code of Ethics has occurred. If a
violation has occurred, the Chief Investment Officer and/or Director of
Investment Management may impose such sanctions or remedial action as he or she
deems appropriate. These sanctions may include, among other things, disgorgement
of any profits or price advantage realized from the transaction that resulted in
the violation to an appropriate charity, requiring reversal of a trade, fines,
suspension of trading privileges or suspension or termination of employment with
BNY. BNY has adopted the following penalty schedule for violations:

1st Incident               Notice of censure and disgorgement





-------------------------------------------------------------------------------------------------------------
2nd Incident         Fines and disgorgement       Assistant Treasurer and below               $ 100
-------------------------------------------------------------------------------------------------------------
                                                  Asst. Vice President, Vice President        $ 200
-------------------------------------------------------------------------------------------------------------
                                                  Managing Director and above                 $ 500
-------------------------------------------------------------------------------------------------------------

3rd Incident         Fines and disgorgement       Assistant Treasurer and below               $ 200
-------------------------------------------------------------------------------------------------------------
                                                  Asst. Vice President, Vice President        $ 500
-------------------------------------------------------------------------------------------------------------
                                                  Managing Director and above                 $ 1000
-------------------------------------------------------------------------------------------------------------



NOTE: The BNYIA Oversight Committee retains the right to impose greater or
lesser sanctions depending upon the facts and circumstances surrounding the
violations. All fines and disgorgement of profits (or losses avoided) will be
paid by the access person directly to BNY. BNY will then donate all monies
collected to a charitable organization. A rolling 3 year period will be
monitored for multiple incidents.


January 2006



                                                                               6



                                    EXHIBIT A

         The term "beneficial ownership" of securities includes not only
ownership of securities held by an access person for his or her own benefit,
whether in bearer form or registered in his or her own name or otherwise, but
also ownership of securities held for his or her benefit by others (regardless
of whether or how they are registered), such as custodians, brokers, executors,
administrators, or trustees (including trusts in which he or she has only a
remainder interest), and securities held for his or her account by pledges,
securities owned by a partnership in which he or she is a member, and securities
owned by any corporation which he or she should regard as a personal holding
corporation. Correspondingly, this term excludes securities held by an access
person for the benefit of someone else.

         Ordinarily, this term does not include securities held by executors or
administrators in estates in which an access person is a legatee or beneficiary
unless there is a specific legacy to such person of such securities or such
person is the sole legatee or beneficiary and there are other assets in the
estate sufficient to pay debts ranking ahead of such legacy, or the securities
are held in the estate more than one year after the decedent's death.

         Securities held in the name of another are considered as "beneficially"
owned by an access person where such person enjoys "benefits substantially
equivalent to ownership." The Securities and Exchange Commission has said that,
although final determination of beneficial ownership is a question to be
determined in the light of the facts of a particular case, generally a person is
regarded as the beneficial owner of securities held in the name of his or her
spouse and their minor children. Absent special circumstances, such relationship
ordinarily results in such person obtaining benefits substantially equivalent to
ownership, e,g., application of the income derived from such securities to
maintain a common home, to meet expenses which such person otherwise would meet
from other sources, or the ability to exercise a controlling influence over the
purchase, sale or voting or such securities.

         An access person also is regarded as the beneficial owner of securities
held in the name of another person if, by reason of any contract, understanding,
relationship, agreement or other arrangement, he obtains therefrom benefits
substantially equivalent to those of ownership. Moreover, the fact that the


                                                                               7




holder is a relative or relative of a spouse and sharing the same home as an
access person may in itself indicate that the access person would obtain
benefits substantially equivalent to those of ownership from securities held in
the name of such relative. Thus, absent countervailing facts, it is expected
that securities held by relatives who share the same home as an access person
will be treated as being beneficially owned by the access person. An access
person also is regarded as the beneficial owner of securities held in the name
of a spouse, minor child or other person, even though he does not obtain
therefrom the aforementioned benefits or ownership, if he can vest or revest
title in himself at once or at some future time.

         With respect to trusts, an access person is a "beneficial owner of a
trust" if (a) the trustee is an "insider" with respect to the trust and (b) the
trustee has a "pecuniary interest" in the securities held by the trust. A
trustee is an "insider" with respect to the trust if the trustee is an officer
or director of any issuer whose securities are held in the trust. The trustee is
also an "insider" if the trustee and the trust, either individually or in the
aggregate, beneficially own more than ten percent of a security which is also
held by the registered investment company with respect to which such trustee is
an access person. Note that institutions engaged in holding securities for their
clients in the ordinary course of business, and eligible to file a Schedule 13G,
do not have to include customer account holdings in determining the ten percent
beneficial owner status and, thus, customer trust accounts would not be included
in the calculation of the ten percent beneficial ownership.

         A trustee will have a "pecuniary interest" in the trust if (a) the
trustee or at least one member of the trustee's immediate family is a
beneficiary of the trust or (b) the trustee receives a performance fee except
where the fee is calculated, at a minimum, on an annual basis and the securities
of an issuer (for which the access person is an "insider") do not comprise more
than ten percent of the market value of the trust's portfolio.




                                                                               8




                                    EXHIBIT B


             Text of Rule 17i-1(b) under the Investment Company Act
             ------------------------------------------------------


The purpose of this Investment Company Code of Ethics is to provide procedures
consistent with the Investment Company Act and, more specifically, Rule
1.7j-l(b) which reads as follows:

         "It is unlawful for any affiliated person of or principal underwriter
         for a Fund, or any affiliated person of an investment adviser of or
         principal underwriter for a Fund in connection with the purchase or
         sale, directly or indirectly, by the person of a Security Held or to be
         Acquired by the Fund:

              1.  To employ any device, scheme or artifice to defraud the Fund;

              2.  To make any untrue statement of a material fact to the Fund or
                  omit to state a material fact to the Fund necessary in order
                  to make the statements made to the Fund, in light of the
                  circumstances under which they are made, not misleading;

              3.  To engage in any act, practice, or course of business that
                  operates or would operate as a fraud or deceit on the Fund; or

              4.  To engage in any manipulative practice with respect to the
                  Fund."

For purposes of Rule 17j-1(b):

         (a) "Fund" is defined as "an investment company registered under the
             Investment Company Act."

         (b) "Security Held or to be Acquired by a Fund" means:

                  (i) Any Covered Security which, within the most recent 15
days:

                           (A)      Is or has been held by the Fund; or

                           (B)      Is being or has been considered by the Fund
                                    or its investment adviser for purchase by
                                    the Fund; and

                  (ii)     Any option to purchase or sell, and any security
                           convertible into or exchangeable for, a Covered
                           Security described in paragraph (a)(10)(i) of this
                           Rule 17j-1.

         (c) "Covered Security" means "any note, stock, treasury stock, security
             future, bond, debenture, evidence of indebtedness, certificate of
             interest or participation in any profit-sharing agreement,
             collateral-trust certificate, preorganization certificate or
             subscription, transferable share, investment contract, voting-trust
             certificate, certificate of deposit for a security, fractional
             undivided interest in oil, gas, or other mineral rights, any put,
             call, straddle, option, or privilege on any security (including a
             certificate of deposit) or on any group or index of securities
             (including any interest therein or based on the value thereof), or
             any put, call, straddle, option or privilege entered into on a
             national securities exchange relating to foreign currency, or, in
             general, any interest or instrument commonly known as a `security,'
             or any certificate of interest or participation in,


                                                                               9




             temporary or interim certificate for, receipt for, guarantee of, or
             warrant or right to subscribe to or purchase, any of the
             foregoing."


                                                                              10




                                 Acknowledgment
                                 --------------

         I hereby acknowledge receipt of the ____ BNY Asset Management ____
Estabrook Capital Management Investment Company Code of Ethics and certify that
I have read it and agree to abide by it. I also confirm that I have instructed
all brokerage houses and banks where I maintain a securities or investment
account to supply duplicate copies of my monthly statement to one of The Bank of
New York's BNY Asset Management Surveillance Officers. I hereby certify that I
have never been found civilly liable for or criminally guilty of insider trading
and that no legal proceedings alleging that I have violated the law on insider
trading are now pending or, to my knowledge, threatened by any person or
authority.

Date:
         ---------------------------

         ---------------------------

                                                     (Signature)


                                                     ---------------------------
                                                     (Print Name)



                                                                              11



Exhibit C

                 BNY Asset Management / Private Client Services
                   Employee Securities Account Disclosure Form

The EMPLOYEE SECURITIES ACCOUNT APPROVAL FORM is used to identify all brokerage
accounts in which you, as an employee of BNY Asset Management or Private Client
Services, your spouse, dependent children and other related persons hold a
beneficial interest

As an employee of the BNYAM / Estabrook, please recognize that from time to time
we will use the resources at our disposal to ascertain the continuing accuracy
of this disclosure.





----------------------------------------------------------------------------------------------------------
Name:                                                                Dept.
----------------------------------------------------------------------------------------------------------
Immediate Supervisor:               Group Director:                       Extension:
----------------------------------------------------------------------------------------------------------

Please provide the following information for each account in which you, your
spouse or dependent child have a beneficial interest.

Firm Name:
                      ------------------------------------------------------------------------------------
Address:
                      ------------------------------------------------------------------------------------

Account Rep:                                                    Phone Number:
                      -------------------------------                         ----------------------------
Account #:
                      ------------------------------------------------------------------------------------
Account Name:
                      ------------------------------------------------------------------------------------
Investment Restrictions
                        ----------------------------------------------------------------------------------
Investment Control
                   ---------------------------------------------------------------------------------------

Firm Name:
                      ------------------------------------------------------------------------------------
Address:
                      ------------------------------------------------------------------------------------

Account Rep:                                                    Phone Number:
                      -------------------------------                         ----------------------------
Account #:
                      ------------------------------------------------------------------------------------
Account Name:
                      ------------------------------------------------------------------------------------
Investment Restrictions
                        ----------------------------------------------------------------------------------
Investment Control
                   ---------------------------------------------------------------------------------------

Firm Name:
                      ------------------------------------------------------------------------------------
Address:
                      ------------------------------------------------------------------------------------

Account Rep:                                                    Phone Number:
                      -------------------------------                         ----------------------------
Account #:
                      ------------------------------------------------------------------------------------
Account Name:
                      ------------------------------------------------------------------------------------
Investment Restrictions
                        ----------------------------------------------------------------------------------
Investment Control
                   ---------------------------------------------------------------------------------------

Firm Name:
                      ------------------------------------------------------------------------------------
Address:
                      ------------------------------------------------------------------------------------

Account Rep:                                                    Phone Number:
                      -------------------------------                         ----------------------------
Account #:
                      ------------------------------------------------------------------------------------
Account Name:
                      ------------------------------------------------------------------------------------
Investment Restrictions
                        ----------------------------------------------------------------------------------
Investment Control
                   ---------------------------------------------------------------------------------------
|_|      I do not maintain any brokerage accounts at this time







                                                                              12





                                                                  Exhibit (q)(1)


                                TDAX FUNDS, INC.

                                POWER OF ATTORNEY

                           KNOW ALL MEN BY THESE PRESENTS, that the undersigned
hereby constitutes and appoints David W. Jaffin and David M. Kelley with full
power of substitution and resubstitution, as his true and lawful
attorneys-in-fact and agents to execute in his name, place and stead, and on his
behalf, in his capacity as an officer and director, the Registration Statement
on Form N-1A, and any and all amendments thereto (including pre-effective and
post-effective amendments) and any Registration Statement on Form N-14, and any
and all amendments thereto (including pre-effective and post-effective
amendments) filed by TDAX Funds, Inc. (the "Corporation") with the Securities
and Exchange Commission under the Securities Act of 1933, as amended, and under
the Investment Company Act of 1940, as amended, and any and all other
instruments which such attorneys-in-fact and agents deem necessary or advisable
to enable the Corporation to comply with the Securities Act of 1933, as amended,
the Investment Company Act of 1940, as amended, the rules, regulations and
requirements of the Securities and Exchange Commission, and the securities or
Blue Sky laws of any state or other jurisdiction; and the undersigned hereby
ratifies and confirms as his own act and deed any and all that such
attorneys-in-fact and agents shall do or cause to be done by virtue hereof.


                  IN WITNESS WHEREOF, I have executed this Power of Attorney
this 14th day of August, 2007.


                                             /s/ Anthony F. Dudzinksi
                                             ------------------------
                                             Anthony F. Dudzinksi

STATE OF NEW YORK )
                  :       ss.:
COUNTY OF NEW YORK)


                  On this 14th day of August, 2007 personally appeared before
me, a Notary Public in and for said County and State, the person named above who
is known to me to be the person whose name and signature is affixed to the
foregoing Power of Attorney and who acknowledged the same to be his voluntary
act and deed for the intents and purposes therein set forth.





                                                                  Exhibit (q)(1)


                                TDAX FUNDS, INC.

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints Anthony F. Dudzinksi, David W. Jaffin and David M. Kelley with full
power of substitution and resubstitution, as his true and lawful
attorneys-in-fact and agents to execute in his name, place and stead, and on his
behalf, in his capacity as a director, the Registration Statement on Form N-1A,
and any and all amendments thereto (including pre-effective and post-effective
amendments) and any Registration Statement on Form N-14, and any and all
amendments thereto (including pre-effective and post-effective amendments) filed
by TDAX Funds, Inc. (the "Corporation") with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, and under the
Investment Company Act of 1940, as amended, and any and all other instruments
which such attorneys-in-fact and agents deem necessary or advisable to enable
the Corporation to comply with the Securities Act of 1933, as amended, the
Investment Company Act of 1940, as amended, the rules, regulations and
requirements of the Securities and Exchange Commission, and the securities or
Blue Sky laws of any state or other jurisdiction; and the undersigned hereby
ratifies and confirms as his own act and deed any and all that such
attorneys-in-fact and agents shall do or cause to be done by virtue hereof.
                  IN WITNESS WHEREOF, I have executed this Power of Attorney
this 6th day of August, 2007.


                                             /s/ R. Charles Tschampion
                                             -------------------------
                                             R. Charles Tschampion

STATE OF New York      )
                       :       ss.:
COUNTY OF  New York    )


                  On this 6th day of August, 2007 personally appeared before me,
a Notary Public in and for said County and State, the person named above who is
known to me to be the person whose name and signature is affixed to the
foregoing Power of Attorney and who acknowledged the same to be his voluntary
act and deed for the intents and purposes therein set forth.





                                                                  Exhibit (q)(1)


                                TDAX FUNDS, INC.

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints Anthony F. Dudzinksi, David W. Jaffin and David M. Kelley with full
power of substitution and resubstitution, as his true and lawful
attorneys-in-fact and agents to execute in his name, place and stead, and on his
behalf, in his capacity as a director, the Registration Statement on Form N-1A,
and any and all amendments thereto (including pre-effective and post-effective
amendments) and any Registration Statement on Form N-14, and any and all
amendments thereto (including pre-effective and post-effective amendments) filed
by TDAX Funds, Inc. (the "Corporation") with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, and under the
Investment Company Act of 1940, as amended, and any and all other instruments
which such attorneys-in-fact and agents deem necessary or advisable to enable
the Corporation to comply with the Securities Act of 1933, as amended, the
Investment Company Act of 1940, as amended, the rules, regulations and
requirements of the Securities and Exchange Commission, and the securities or
Blue Sky laws of any state or other jurisdiction; and the undersigned hereby
ratifies and confirms as his own act and deed any and all that such
attorneys-in-fact and agents shall do or cause to be done by virtue hereof.
                  IN WITNESS WHEREOF, I have executed this Power of Attorney
this 9th day of August, 2007.


                                             /s/ Ernest J. Scalberg
                                             ----------------------
                                             Ernest J. Scalberg

STATE OF California     )
                        :       ss.:
COUNTY OF Monterey      )


                  On this 9th day of August, 2007 personally appeared before me,
a Notary Public in and for said County and State, the person named above who is
known to me to be the person whose name and signature is affixed to the
foregoing Power of Attorney and who acknowledged the same to be his voluntary
act and deed for the intents and purposes therein set forth.





                                                                  Exhibit (q)(1)


                                TDAX FUNDS, INC.

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints Anthony F. Dudzinksi, David W. Jaffin and David M. Kelley with full
power of substitution and resubstitution, as his true and lawful
attorneys-in-fact and agents to execute in his name, place and stead, and on his
behalf, in his capacity as a director, the Registration Statement on Form N-1A,
and any and all amendments thereto (including pre-effective and post-effective
amendments) and any Registration Statement on Form N-14, and any and all
amendments thereto (including pre-effective and post-effective amendments) filed
by TDAX Funds, Inc. (the "Corporation") with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, and under the
Investment Company Act of 1940, as amended, and any and all other instruments
which such attorneys-in-fact and agents deem necessary or advisable to enable
the Corporation to comply with the Securities Act of 1933, as amended, the
Investment Company Act of 1940, as amended, the rules, regulations and
requirements of the Securities and Exchange Commission, and the securities or
Blue Sky laws of any state or other jurisdiction; and the undersigned hereby
ratifies and confirms as his own act and deed any and all that such
attorneys-in-fact and agents shall do or cause to be done by virtue hereof.
                  IN WITNESS WHEREOF, I have executed this Power of Attorney
this 6th day of August, 2007.


                                             /s/ Michael G. Smith
                                             --------------------
                                             Michael G. Smith



STATE OF Illinois       )
                        :       ss.:
COUNTY OF Will          )


                  On this 6th day of August, 2007 personally appeared before me,
a Notary Public in and for said County and State, the person named above who is
known to me to be the person whose name and signature is affixed to the
foregoing Power of Attorney and who acknowledged the same to be his voluntary
act and deed for the intents and purposes therein set forth.





                                                                  Exhibit (q)(1)


                                TDAX FUNDS, INC.

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints Anthony F. Dudzinksi and David W. Jaffin with full power of
substitution and resubstitution, as his true and lawful attorneys-in-fact and
agents to execute in his name, place and stead, and on his behalf, in his
capacity as an officer, the Registration Statement on Form N-1A, and any and all
amendments thereto (including pre-effective and post-effective amendments) and
any Registration Statement on Form N-14, and any and all amendments thereto
(including pre-effective and post-effective amendments) filed by TDAX Funds,
Inc. (the "Corporation") with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, and under the Investment Company Act of
1940, as amended, and any and all other instruments which such attorneys-in-fact
and agents deem necessary or advisable to enable the Corporation to comply with
the Securities Act of 1933, as amended, the Investment Company Act of 1940, as
amended, the rules, regulations and requirements of the Securities and Exchange
Commission, and the securities or Blue Sky laws of any state or other
jurisdiction; and the undersigned hereby ratifies and confirms as his own act
and deed any and all that such attorneys-in-fact and agents shall do or cause to
be done by virtue hereof.



                  IN WITNESS WHEREOF, I have executed this Power of Attorney
this 6th day of August, 2007.


                                             /s/ David M. Kelley
                                             -------------------
                                             David M. Kelley

STATE OF NEW YORK   )
                    :       ss.:
COUNTY OF NEW YORK  )


                  On this 6th day of August, 2007 personally appeared before me,
a Notary Public in and for said County and State, the person named above who is
known to me to be the person whose name and signature is affixed to the
foregoing Power of Attorney and who acknowledged the same to be his voluntary
act and deed for the intents and purposes therein set forth.





                                                                  Exhibit (q)(1)


                                TDAX FUNDS, INC.

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints Anthony F. Dudzinksi and David M. Kelley with full power of
substitution and resubstitution, as his true and lawful attorneys-in-fact and
agents to execute in his name, place and stead, and on his behalf, in his
capacity as an officer, the Registration Statement on Form N-1A, and any and all
amendments thereto (including pre-effective and post-effective amendments) and
any Registration Statement on Form N-14, and any and all amendments thereto
(including pre-effective and post-effective amendments) filed by TDAX Funds,
Inc. (the "Corporation") with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, and under the Investment Company Act of
1940, as amended, and any and all other instruments which such attorneys-in-fact
and agents deem necessary or advisable to enable the Corporation to comply with
the Securities Act of 1933, as amended, the Investment Company Act of 1940, as
amended, the rules, regulations and requirements of the Securities and Exchange
Commission, and the securities or Blue Sky laws of any state or other
jurisdiction; and the undersigned hereby ratifies and confirms as his own act
and deed any and all that such attorneys-in-fact and agents shall do or cause to
be done by virtue hereof.



                  IN WITNESS WHEREOF, I have executed this Power of Attorney
this 14th day of August, 2007.


                                             /s/ David W. Jaffin
                                             -------------------
                                             David W. Jaffin

STATE OF NEW YORK   )
                    :       ss.:
COUNTY OF NEW YORK  )


                  On this 14th day of August, 2007 personally appeared before
me, a Notary Public in and for said County and State, the person named above who
is known to me to be the person whose name and signature is affixed to the
foregoing Power of Attorney and who acknowledged the same to be his voluntary
act and deed for the intents and purposes therein set forth.






                                                                  Exhibit (q)(2)


                           SECRETARY CERTIFICATION OF
                            BOARD OF DIRECTORS ACTION

         I, David W. Jaffin, hereby certify that I am the duly elected and
qualified Secretary of TDAX Funds, Inc. (the "Company"), and that as such I am
authorized to execute and deliver this Certificate on behalf of the Company, and
further certify as follows:

         (i) The following resolution is a true and correct copy of a resolution
that was duly and unanimously adopted at a meeting of the Board of Directors of
the Company duly called and held on July 24, 2007 at which a quorum was present
and participating throughout.

         (ii) The following resolution has not since been amended.

                  APPROVAL OF POWER OF ATTORNEY
                  -----------------------------

                  RESOLVED, that the Power of Attorney in the form presented at
                  this Meeting, authorizing David M. Kelley, Anthony F.
                  Dudzinski and David W. Jaffin to execute and sign all
                  amendments and supplements to the Company's Registration
                  Statement on behalf of the Company's Directors and principal
                  officers be, and hereby is approved by the Board of Directors.



         The undersigned has executed this Certificate as Secretary of the
Company on this 14th day of August, 2007.



                                               /s/ David W. Jaffin
                                               ----------------------------
                                               David W. Jaffin
                                               Secretary



         I, Anthony F. Dudzinski, an officer of TDAX Funds, Inc. (the
"Company"), hereby certify that, David W. Jaffin is, on and as of this 14th day
of August, 2007, the duly elected and qualified Secretary of the Company, and is
duly authorized and empowered to execute the foregoing Certificate, and his
signature thereon is genuine.



                                               /s/ Anthony F. Dudzinski
                                               ----------------------------
                                               Anthony F. Dudzinski
                                               Chief Operating Officer

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933		[X]

Pre-Effective Amendment No.		[ ]

Post-Effective Amendment No. 1		[X]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940		[X]

Amendment No. 3		[X]
(Check appropriate box or boxes)

Zacks 2010 Lifecycle Index	TDAXTN
Zacks 2020 Lifecycle Index	TDAXTW
Zacks 2030 Lifecycle Index	TDAXTH
Zacks 2040 Lifecycle Index	TDAXFO
Zacks In-Target Lifecycle Index	TDAXIT

Trading Symbol:	TDD
CUSIP Number:	87238A 108
Underlying Index (Symbol):	Zacks 2010 Lifecycle Index (TDAXTN)
Inception Date:	September 26, 2007

SHAREHOLDER FEES (fees paid directly from your investment)

Sales Charge (Load) Imposed on Purchases:	None
Transaction Fee on Purchases and Redemptions:	Varies¹


ANNUAL FUND OPERATING EXPENSES (expenses deducted from the Fund’s assets)

Management Fee²:	0.65%
Other Expenses³:	0.08%
Acquired Fund Fees and Expenses³:	0.00%
TOTAL ANNUAL FUND OPERATING EXPENSES:	0.73%
Less: Expense Reduction/Reimbursement⁴	0.08%
NET ANNUAL OPERATING EXPENSES⁴:	0.65%

¹ An investor purchasing or redeeming Creation Units of the Fund will pay to the Fund a transaction fee of $500, plus an additional fee of up to $2,500 if the investor does not create or redeem through the NSCC (for a total of up to $3,000). An investor buying or selling the Fund in the secondary market will pay a commission to his broker in an amount established by the broker. Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above. ² The Fund pays the Advisor a single, unified management fee for arranging for certain non-distribution related services necessary for the Fund to operate. For more information about the unified management fee, see “Investment Adviser” under “Fund Management”. ³“Other Expenses” and “Acquired Fund Fees and Expenses” are based on estimated amounts for the current fiscal year. ⁴ Amerivest has contractually agreed to pay Fund operating expenses (excluding, among other things, interest, taxes, brokerage commissions and extraordinary expenses) in order to limit Net Annual Operating Expenses for shares of the Fund to 0.65% of the Fund’s average net assets (the “Expense Cap”). The Expense Cap will remain in effect until at least September 30, 2008. Amerivest is permitted to be reimbursed for fee reductions and/or expense payments made in the prior three fiscal years. This reimbursement may be requested by Amerivest if the aggregate amount actually paid by the Fund toward operating expenses for such fiscal year (taking into account the reimbursement) does not exceed the Expense Cap.

1 YEAR	3 YEARS
$67	$209

INTRODUCTION	1
OVERVIEW OF THE INVESTMENT OBJECTIVES AND STRATEGIES OF THE FUNDS	5
ADDITIONAL INFORMATION ABOUT THE FUNDS, THEIR PRINCIPAL STRATEGIES AND RELATED RISKS	32
BUYING AND SELLING FUND SHARES	37
PORTFOLIO TURNOVER RATE	42
PORTFOLIO HOLDINGS	42
FUND MANAGEMENT	42
DIVIDENDS, CAPITAL GAINS, AND TAXES	45
DAILY PRICING	47
DELIVERY OF FUND DOCUMENTS	48
LICENSE GRANT	48
FINANCIAL HIGHLIGHTS	49

Trading Symbol:	TDH
CUSIP Number:	87238A 207
Underlying Index (Symbol):	Zacks 2020 Lifecycle Index (TDAXTW)
Inception Date:	September 26, 2007

Trading Symbol:	TDN
CUSIP Number:	87238A 306
Underlying Index (Symbol):	Zacks 2030 Lifecycle Index (TDAXTH)
Inception Date:	September 26, 2007

Trading Symbol:	TDV
CUSIP Number:	87238A 405
Underlying Index (Symbol):	Zacks 2040 Lifecycle Index (TDAXFO)
Inception Date:	September 26, 2007

Trading Symbol:	TDX
CUSIP Number:	87238A 504
Underlying Index (Symbol):	Zacks In-Target Lifecycle Index (TDAXIT)
Inception Date:	September 26, 2007

/s/ David M. Kelley^*	President and Chief Executive Officer	September 26, 2007
David M. Kelley

/s/ David W. Jaffin^*	Treasurer and Secretary	September 26, 2007
David W. Jaffin

/s/ Anthony F. Dudzinski	Director, Chairman and Chief Operating Officer	September 26, 2007
Anthony F. Dudzinski

/s/ Ernest J. Scalberg^*	Director	September 26, 2007
Ernest J. Scalberg

/s/ Michael G. Smith^*	Director	September 26, 2007
Michael G. Smith

1 YEAR	3 YEARS
$17,250	$52,750

1 YEAR	3 YEARS
$17,250	$52,750

/s/ R. Charles Tschampion^*	Director	September 26, 2007
R. Charles Tschampion