CUSTODIAN AGREEMENT
AGREEMENT dated as of March 1, 2000 between BANKERS TRUST COMPANY (the
"Custodian") and ADVANTUS INTERNATIONAL BALANCED FUND, INC. (the "Customer").
WHEREAS, the Customer desires to appoint the Custodian as custodian on
behalf of the Customer under the terms and conditions set forth in this
Agreement, and the Custodian has agreed to so act as custodian.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
1. EMPLOYMENT OF CUSTODIAN. The Customer hereby employs the Custodian as
custodian of all assets of the Customer which are delivered to and accepted by
the Custodian or any Subcustodian (as that term is defined in Section 4)
("Property") pursuant to the terms and conditions set forth herein. For purposes
of this Agreement, "delivery" of Property shall include the acquisition of a
security entitlement (as that term is defined in the New York Uniform Commercial
Code ("UCC")) with respect thereto. Without limitation, such Property shall
include stocks and other equity interests of every type, evidences of
indebtedness, other instruments representing same or rights or obligations to
receive, purchase, deliver or sell same and other non-cash investment property
of the Customer ("Securities") and cash from any source and in any currency
("Cash"), provided that the Custodian shall have the right, in its sole
discretion, to refuse to accept as Property any property of a Customer that the
Custodian considers not to be appropriate or in proper form for deposit for any
reason. The Custodian shall not be responsible for any property of the Customer
held or received by the Customer or others and not delivered to the Custodian or
any Subcustodian.
2. MAINTENANCE OF PROPERTY AT CUSTODIAN AND SUBCUSTODIAN LOCATIONS.
Pursuant to Instructions, the Customer shall direct the Custodian to (a) settle
Securities transactions and maintain cash 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 payment or where such Securities are acquired
and (b) maintain Cash and Cash equivalents in such countries in amounts
reasonably necessary to effect the Customer's transactions in such Securities.
Instructions to settle Securities transactions in any country shall be deemed to
authorize the holding of such Property in that country.
3. CUSTODY ACCOUNT. The Custodian agrees to establish and maintain a
custody account or accounts on its books in the name of the Customer (the
"Account") for any and all Property received and accepted by the Custodian or
any Subcustodian for the account of the Customer. The Customer acknowledges its
responsibility as a principal for all of its obligations to the Custodian
arising under or in connection with this Agreement, warrants its authority to
deposit in the Account any Property received therefor by the Custodian or a
Subcustodian and to give, and authorize others to give, instructions relative
thereto. The Custodian may deliver securities of the same class in place of
those deposited in the Account.
The Custodian shall hold, keep safe and protect as custodian for Account,
on behalf of the Customer, all Property in such Account and, to the extent such
Property constitutes financial assets for purposes of the New York UCC, shall
maintain those financial assets in such Account as security entitlements in
favor of the Customer. All transactions, including, but not limited to, foreign
exchange transactions, involving the Property shall be executed
or settled solely in accordance with Instructions, except that until the
Custodian receives Instructions to the contrary, the Custodian will:
(a) collect all interest and dividends and all other income and payments,
whether paid in cash or in kind, on the Property, as the same become
payable and credit the same to the Account;
(b) present for payment all Securities held in the Account which are
called, redeemed or retired or otherwise become payable and all
coupons and other income items which call for payment upon
presentation to the extent that the Custodian or Subcustodian is
actually aware of such opportunities and hold the cash received in the
Account pursuant to this Agreement;
(c) (i) exchange Securities where the exchange is purely ministerial
(including, without limitation, the exchange of temporary securities
for those in definitive form and the exchange of warrants, or other
documents of entitlement to securities, for the Securities themselves)
and (ii) when notification of a tender or exchange offer (other than
ministerial exchanges described in (i) above) is received for the
Account, endeavor to receive Instructions, provided that if such
Instructions are not received in time for the Custodian to take timely
action, no action shall be taken with respect thereto;
(d) whenever notification of a rights entitlement or a fractional interest
resulting from a rights issue, stock dividend or stock split is
received for the Account and such rights entitlement or fractional
interest bears an expiration date, if after endeavoring to obtain
Instructions such Instructions are not received in time for the
Custodian to take timely action or if actual notice of such actions
was received too late to seek Instructions, sell in the discretion of
the Custodian (which sale the Customer hereby authorizes the Custodian
to make) such rights entitlement or fractional interest and credit the
Account with the net proceeds of such sale;
(e) execute in the Customer's name for the Account, whenever the Custodian
deems it appropriate, such ownership and other certificates as may be
required to obtain the payment of income from the Property in the
Account;
(f) pay for the Account, any and all taxes and levies in the nature of
taxes imposed on interest, dividends or other similar income on the
Property in the Account by any governmental authority. In the event
there is insufficient Cash available in the Account to pay such taxes
and levies, the Custodian shall notify the Customer of the amount of
the shortfall and the Customer, at its option, may deposit additional
Cash in the Account or take steps to have sufficient Cash available.
The Customer agrees, when and if requested by the Custodian and
required in connection with the payment of any such taxes to cooperate
with the Custodian in furnishing information, executing documents or
otherwise; and
(g) appoint brokers and agents for any of the ministerial transactions
involving the Securities described in (a) - (f), including, without
limitation, affiliates of the Custodian or any Subcustodian.
4. SUBCUSTODIANS AND SECURITIES SYSTEMS. The Customer authorizes and
instructs the Custodian to maintain the Property in the Account directly in one
of its U.S. branches or indirectly through custody accounts which have been
established by the Custodian with the following other securities intermediaries:
(a) one of its U.S. branches or another U.S. bank or trust company or branch
thereof located in the U.S. which is itself qualified under
-2-
the Investment Company Act of 1940, as amended ("1940 Act"), to act as custodian
(individually, a "U.S. Subcustodian"), or a U.S. securities depository or
clearing agency or system in which the Custodian or a U.S. Subcustodian
participates (individually, a "U.S. Securities System") or (b) one of its
non-U.S. branches or majority-owned non-U.S. subsidiaries, a non-U.S. branch or
majority-owned subsidiary of a U.S. bank or a non-U.S. bank or trust company,
acting as custodian (individually, a "non-U.S. Subcustodian"; U.S. Subcustodians
and non-U.S. Subcustodians, collectively, "Subcustodians"), or a non-U.S.
depository or clearing agency or system in which the Custodian or any
Subcustodian participates (individually, a "non-U.S. Securities System"; U.S.
Securities System and non-U.S. Securities System, collectively, "Securities
System"), PROVIDED that in each case in which a U.S. Subcustodian or U.S.
Securities System is employed, each such Subcustodian or Securities System shall
have been approved by Instructions; PROVIDED FURTHER that in each case in which
a non-U.S. Subcustodian or non-U.S. Securities System is employed, (a) such
Subcustodian or Securities System either is (i) a "qualified U.S. bank" as
defined by Rule 17f-5 under the 1940 Act ("Rule 17f-5") or (ii) an "eligible
foreign custodian" within the meaning of Rule 17f-5 or such Subcustodian or
Securities System is the subject of an order granted by the U.S. Securities and
Exchange Commission ("SEC") exempting such agent or the subcustody arrangements
thereto from all or part of the provisions of Rule 17f-5 and (b) the agreement
between the Custodian and such non-U.S. Subcustodian has been approved by
Instructions; it being understood that the Custodian shall have no liability or
responsibility for determining whether the approval of any Subcustodian or
Securities System has been proper under the 1940 Act or any rule or regulation
thereunder.
Upon receipt of Instructions, the Custodian agrees to cease the employment
of any Subcustodian or Securities System with respect to the Customer, and if
desirable and practicable, appoint a replacement subcustodian or securities
system in accordance with the provisions of this Section. In addition, the
Custodian may, at any time in its discretion, upon written notification to the
Customer, terminate the employment of any Subcustodian or Securities System.
Upon request of the Customer, the Custodian shall deliver to the Customer
annually a certificate stating: (a) the identity of each non-U.S. Subcustodian
and non-U.S. Securities System then acting on behalf of the Custodian and the
name and address of the governmental agency or other regulatory authority that
supervises or regulates such non-U.S. Subcustodian and non-U.S. Securities
System; (b) the countries in which each non-U.S. Subcustodian or non-U.S.
Securities System is located; and (c) so long as Rule 17f-5 requires the
Customer's Board of Directors to directly approve its foreign custody
arrangements, such other information relating to such non-U.S. Subcustodians and
non-U.S. Securities Systems as may reasonably be requested by the Customer to
ensure compliance with Rule 17f-5. So long as Rule 17f-5 requires the Customer's
Board of Directors to directly approve its foreign custody arrangements, the
Custodian also shall furnish annually to the Customer information concerning
such non-U.S. Subcustodians and non-U.S. Securities Systems similar in kind and
scope as that furnished to the Customer in connection with the initial approval
of this Agreement. Custodian agrees to promptly notify the Customer if, in the
normal course of its custodial activities, the Custodian has reason to believe
that any non-U.S. Subcustodian or non-U.S. Securities System has ceased to be a
qualified U.S. bank or an eligible foreign custodian each within the meaning of
Rule 17f-5 or has ceased to be subject to an exemptive order from the SEC.
5. USE OF SUBCUSTODIAN. With respect to Property in the Account which is
maintained by the Custodian through a Subcustodian employed pursuant to Section
4:
(a) The Custodian will identify on its books as belonging to the Customer,
any Property maintained through such Subcustodian.
-3-
(b) Any Property in the Account held by a Subcustodian will be subject
only to the instructions of the Custodian or its agents.
(c) Property deposited with a Subcustodian will be maintained in an
account holding only assets for customers of the Custodian.
(d) Any agreement the Custodian shall enter into with a Subcustodian with
respect to maintaining Property shall require that (i) the Account
will be adequately indemnified or its losses adequately insured; (ii)
the Securities so maintained will not be subject to any right, charge,
security interest, lien or claim of any kind in favor of such
Subcustodian or its creditors except a claim for payment in accordance
with such agreement for their safe custody or administration and
expenses related thereto, (iii) beneficial ownership of such
Securities will be freely transferable without the payment of money or
value other than for safe custody or administration and expenses
related thereto; and (iv) adequate records will be maintained
identifying the Property maintained pursuant to such agreement as
belonging to the Custodian, on behalf of its customers and (v) to the
extent permitted by applicable law, officers of or auditors employed
by, or other representatives of or designated by, the Custodian,
including the independent public accountants of or designated by, the
Customer be given access to the books and records of such Subcustodian
relating to its actions under its agreement pertaining to any Property
held by it thereunder or confirmation of or pertinent information
contained in such books and records be furnished to such persons
designated by the Custodian.
6. USE OF SECURITIES SYSTEM. With respect to Property in the Account which
is maintained by the Custodian or any Subcustodian through a Securities System
employed pursuant to Section 4:
(a) The Custodian shall, and the Subcustodian shall be required by its
agreement with the Custodian to, identify on its books such Property
as being maintained for the account of the Custodian or Subcustodian
for its customers.
(b) Any Property maintained through a Securities System for the account of
the Custodian or a Subcustodian will be subject only to the
instructions of the Custodian or such Subcustodian, as the case may
be.
(c) Property deposited with a Securities System will be maintained in an
account holding only assets for customers of the Custodian or
Subcustodian, as the case may be, unless precluded by applicable law,
rule, or regulation.
(d) The Custodian shall provide the Customer with any report obtained by
the Custodian on the Securities System's accounting system, internal
accounting control and procedures for safeguarding securities
deposited in the Securities System.
7. AGENTS. The Custodian may at any time or times in its sole discretion
appoint (or remove) any other U.S. bank or trust company which is itself
qualified under the 1940 Act to act as custodian, as its agent to carry out such
of the provisions of this Agreement as the Custodian may from time to time
direct; PROVIDED, however, that the appointment of any agent shall not relieve
the Custodian of its responsibilities or liabilities hereunder.
-4-
8. RECORDS, OWNERSHIP OF PROPERTY, STATEMENTS, OPINIONS OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS.
(a) The ownership of the Property whether maintained directly by the
Custodian or indirectly through a Subcustodian or a Securities System as
authorized herein, shall be clearly recorded on the Custodian's books as
belonging to the Account and not for the Custodian's own interest. The Custodian
shall keep accurate and detailed accounts of all investments, receipts,
disbursements and other transactions for the Account. All accounts, books and
records of the Custodian relating thereto shall be open to inspection and audit
at all reasonable times during normal business hours by any person designated by
the Customer. All such accounts shall be maintained and preserved in the form
reasonably requested by the Customer. The Custodian will supply to the Customer
from time to time, as mutually agreed upon, a statement in respect to any
Property in the Account maintained by the Custodian or by a Subcustodian. In the
absence of the filing in writing with the Custodian by the Customer of
exceptions or objections to any such statement within sixty (60) days of the
mailing thereof, the Customer shall be deemed to have approved such statement
and in such case or upon written approval of the Customer of any such statement,
such statement shall be presumed to be for all purposes correct with respect to
all information set forth therein.
(b) The Custodian shall take all reasonable action as the Customer may
request to obtain from year to year favorable opinions from the Customer's
independent certified public accountants with respect to the Custodian's
activities hereunder in connection with the preparation of the Customer's Form
N-1A and the Customer's Form N-SAR or other periodic reports to the SEC and with
respect to any other requirements of the SEC.
(c) At the request of the Customer, the Custodian shall deliver to the
Customer a written report prepared by the Custodian's independent certified
public accountants with respect to the services provided by the Custodian under
this Agreement, including, without limitation, the Custodian's accounting
system, internal accounting control and procedures for safeguarding Property,
including Property deposited and/or maintained in a securities system or with a
Subcustodian. Such report shall be of sufficient scope and in sufficient detail
as may reasonably be required by the Customer and as may reasonably be obtained
by the Custodian.
(d) The Customer may elect to participate in any of the electronic on-line
service and communications systems offered by the Custodian which can provide
the Customer, on a daily basis, with the ability to view on-line or to print on
a hard copy various reports of Account activity and of Property being held in
the Account. To the extent that such service shall include market values of
Securities in the Account, the Customer hereby acknowledges that the Custodian
now obtains and may in the future obtain information on such values from outside
sources that the Custodian considers to be reliable and the Customer agrees that
the Custodian (i) does not verify or represent or warrant either the reliability
of such service nor the accuracy or completeness of any such information
furnished or obtained by or through such service and (ii) shall be without
liability in selecting and utilizing such service or furnishing any information
derived therefrom.
9. HOLDING OF SECURITIES, NOMINEES, ETC. Securities in the Account which
are maintained by the Custodian or any Subcustodian may be held directly by such
entity in the name of the Customer or in bearer form or maintained in the
Custodian's or Subcustodian's name, or in the name of the Custodian's or
Subcustodian's nominee. Securities that are maintained through a Subcustodian or
which are eligible for deposit in a Securities System as provided above may be
maintained with the Subcustodian or the Securities System in an account for the
Custodian's or Subcustodian's customers, unless prohibited by law, rule, or
regulation. The Custodian or Subcustodian, as the case may be, may combine
certificates representing Securities held in the Account with
-5-
certificates of the same issue held by it as fiduciary or as a custodian. In the
event that any Securities in the name of the Custodian or its nominee or held by
a Subcustodian and registered in the name of such Subcustodian or its nominee
are called for partial redemption by the issuer of such Security, the Custodian
may, subject to the rules or regulations pertaining to allocation of any
Securities System in which such Securities have been deposited, allot, or cause
to be allotted, the called portion of the respective beneficial holders of such
class of Security in any manner the Custodian deems to be fair and equitable.
Securities maintained with a Securities System shall be maintained subject to
the rules of that Securities System governing the rights and obligations among
the Securities System and its participants.
10. PROXIES, ETC. With respect to any proxies, notices, reports or other
communications relative to any of the Securities in the Account, the Custodian
shall perform such services and only such services relative thereto as are (i)
set forth in Section 3 of this Agreement, (ii) described in Exhibit A attached
hereto (as such service therein described may be in effect from time to time)
(the "Proxy Service") or (iii) as may otherwise be agreed upon between the
Custodian and the Customer. The liability and responsibility of the Custodian in
connection with the Proxy Service referred to in (ii) of the immediately
preceding sentence and in connection with any additional services which the
Custodian and the Customer may agree upon as provided in (iii) of the
immediately preceding sentence shall be as set forth in the description of the
Proxy Service and as may be agreed upon by the Custodian and the Customer in
connection with the furnishing of any such additional service and shall not be
affected by any other term of this Agreement. Neither the Custodian nor its
nominees or agents shall vote upon or in respect of any of the Securities in the
Account, execute any form of proxy to vote thereon, or give any consent or take
any action (except as provided in Section 3) with respect thereto except upon
the receipt of Instructions relative thereto.
11. SEGREGATED ACCOUNT. To assist the Customer in complying with the
requirements of the 1940 Act and the rules and regulations thereunder, the
Custodian shall, upon receipt of Instructions, establish and maintain a
segregated account or accounts on its books for and on behalf of the Customer.
12. SETTLEMENT PROCEDURES. Securities will be transferred, exchanged or
delivered by the Custodian or a Subcustodian upon receipt by the Custodian of
Instructions which include all information required by the Custodian. Settlement
and payment for Securities received for the Account and delivery of Securities
out of the Account may be effected in accordance with the customary or
established securities trading or securities processing practices and procedures
in the jurisdiction or market in which the transaction occurs, including,
without limitation, delivering Securities to the purchaser thereof or to a
dealer therefor (or an agent for such purchaser or dealer) against a receipt
with the expectation of receiving later payment for such Securities from such
purchaser or dealer, as such practices and procedures may be modified or
supplemented in accordance with the standard operating procedures of the
Custodian in effect from time to time for that jurisdiction or market. The
Custodian shall not be liable for any loss which results from effecting
transactions in accordance with the customary or established securities trading
or securities processing practices and procedures in the applicable jurisdiction
or market.
Notwithstanding that the Custodian may settle purchases and sales against,
or credit income to, the Account, on a contractual basis, as outlined in the
applicable Service Standards as defined below and provided to the Customer by
the Custodian, the Custodian may, at its sole option, reverse such credits or
debits to the Account in the event that the transaction does not settle, or the
income is not received in a timely manner, and the Customer agrees to hold the
Custodian harmless from any losses which may result therefrom.
The applicable Service Standards shall be defined as the Global Guide, the
Policies and Standards Manual, and any other documents issued by the Custodian
from time to time specifying the procedures for communicating
-6-
with the Customer, the terms of any additional services to be provided to the
Customer, and such other matters as may be agreed between the Customer and the
Custodian from time to time.
13. CONDITIONAL CREDITS.
(a) Notwithstanding any other provision of this Agreement, the Custodian
shall not be required to comply with any Instructions to settle the purchase of
any securities for the Account, unless there are sufficient immediately
available funds in the relevant currency in the Account, PROVIDED THAT, if,
after all expenses, debits and withdrawals of Cash in the relevant currency
("Debits") applicable to the Account have been made and if after all Conditional
Credits, as defined below, applicable to the Account have been made final
entries as set forth in (c) below, the amount of immediately available funds in
the relevant currency in such Account is at least equal to the aggregate
purchase price of all Securities for which the Custodian has received
Instructions to settle on that date ("Settlement Date"), the Custodian, upon
settlement, shall credit the Securities to the Account by making a final entry
on its books and records.
(b) Notwithstanding the foregoing, if after all Debits applicable to the
Account have been made, there remains outstanding any Conditional Credit (as
defined below) applicable to the Account or the amount of immediately available
funds in a given currency in such Account are less than the aggregate purchase
price in such currency of all securities for which the Custodian has received
Instructions to settle on the Settlement Date, the Custodian, upon settlement,
may provisionally credit the Securities to the Account by making a conditional
entry on its books and records ("Conditional Credit"), pending receipt of
sufficient immediately available funds in the relevant currency in the Account.
(c) If, within a reasonable time after the posting of a Conditional Credit
and after all Debits applicable to the Account have been made, immediately
available funds in the relevant currency at least equal to the aggregate
purchase price in such currency of all securities subject to a Conditional
Credit on a Settlement Date are deposited into the Account, the Custodian shall
make the Conditional Credit a final entry on its books and records. In such
case, the Customer shall be liable to the Custodian only for late charges at a
rate which the Custodian customarily charges for similar extensions of credit.
(d) If (i) within a reasonable time from the posting of a Conditional
Credit, immediately available funds at least equal to the resultant Debit on a
Settlement Date are not on deposit in the Account, or (ii) any Proceeding shall
occur, the Custodian may sell such of the Securities subject to the Conditional
Credit as it selects in its sole discretion and shall apply the net proceeds of
such sale to cover such Debit, including related late charges, and any remaining
proceeds shall be credited to the Account. If such proceeds are insufficient to
satisfy such debt in full, the Customer shall continue to be liable to the
Custodian for any shortfall. The Custodian shall make the Conditional Credit a
final entry on its books as to the Securities not required to be sold to satisfy
such Debit. Pending payment in full by the Customer of the purchase price for
Securities subject to a Conditional Credit, and the Custodian's making a
Conditional Credit a final entry on its books, and unless consented to by the
Custodian, the Customer shall have no right to give further Instructions in
respect of Securities subject to a Conditional Credit. The Custodian shall have
the sole discretion to determine which Securities shall be deemed to have been
paid for by the Customer out of funds available in the Account. Any such
Conditional Credit may be reversed (and any corresponding Debit shall be
canceled) by the Custodian unless and until the Custodian makes a final entry on
its books crediting such Securities to the Account. The term "Proceeding" shall
mean any insolvency, bankruptcy, receivership, reorganization or similar
proceeding relating to the Customer, whether voluntary or involuntary.
-7-
(e) The Customer agrees that it will not intentionally use the Account to
facilitate the purchase of securities without sufficient funds in the Account
(which funds shall not include the expected proceeds of the sale of the
purchased securities).
14. PERMITTED TRANSACTIONS. The Customer agrees that it will cause
transactions to be made pursuant to this Agreement only upon Instructions in
accordance Section 15 and only for the purposes listed below.
(a) In connection with the purchase or sale of Securities at prices as
confirmed by Instructions.
(b) When Securities are called, redeemed or retired, or otherwise become
payable.
(c) In exchange for or upon conversion into other securities alone or other
securities and cash pursuant to any plan or merger, consolidation,
reorganization, recapitalization or readjustment.
(d) Upon conversion of Securities pursuant to their terms into other
securities.
(e) Upon exercise of subscription, purchase or other similar rights
represented by Securities.
(f) For the payment of interest, taxes, management or supervisory fees,
distributions or operating expenses.
(g) In connection with any borrowings by the Customer requiring a pledge of
Securities, but only against receipt of amounts borrowed or in order to satisfy
requirements for additional or substitute collateral.
(h) In connection with any loans, but only against receipt of collateral as
specified in Instructions which shall reflect any restrictions applicable to the
Customer.
(i) For the purpose of redeeming shares of the capital stock of the
Customer against delivery of the shares to be redeemed to the Custodian, a
Subcustodian or the Customer's transfer agent.
(j) For the purpose of redeeming in kind shares of the Customer against
delivery of the shares to be redeemed to the Custodian, a Subcustodian or the
Customer's transfer agent.
(k) For delivery in accordance with the provisions of any agreement among
the Customer, the Custodian and a broker-dealer registered under the Securities
Exchange Act of 1934 and a member of the National Association of Securities
Dealers, Inc., relating to compliance with the rules of The Options Clearing
Corporation, the Commodities Futures Trading Commission or of any registered
national securities exchange, or of any similar organization or organizations,
regarding escrow or other arrangements in connection with transactions by the
Customer.
(l) For release of Securities to designated brokers under covered call
options, provided, however, that such Securities shall be released only upon
payment to the Custodian of monies for the premium due and a receipt for the
Securities which are to be held in escrow. Upon exercise of the option, or at
expiration, the Custodian will receive the Securities previously deposited from
broker. The Custodian will act strictly in accordance with Instructions in the
delivery of Securities to be held in escrow and will have no responsibility or
liability for any such Securities which are not returned promptly when due other
than to make proper request for such return.
-8-
(m) For spot or forward foreign exchange transactions to facilitate
security trading or receipt of income from Securities related transactions.
(n) Upon the termination of this Agreement as set forth in Section 21.
(o) For other proper purposes.
The Customer agrees that the Custodian shall have no obligation to verify
the purpose for which a transaction is being effected.
15. INSTRUCTIONS. The term "Instructions" means instructions from the
Customer in respect of any of the Custodian's duties hereunder which have been
received by the Custodian in accordance with Section 22 below (i) in writing
(including, without limitation, facsimile transmission) or by tested telex
signed or given by such one or more person or persons as the Customer shall have
from time to time authorized in writing to give the particular class of
Instructions in question and whose name and (if applicable) signature and office
address have been filed with the Custodian, or (ii) which have been transmitted
electronically through an electronic on-line service and communications system
offered by the Custodian or other electronic instruction system acceptable to
the Custodian, or (iii) a telephonic or oral communication by one or more
persons as the Customer shall have from time to time authorized to give the
particular class of Instructions in question and whose name has been filed with
the Custodian; or (iv) upon receipt of such other form of instructions as the
Customer may from time to time authorize in writing and which the Custodian has
agreed in writing to accept. Instructions in the form of oral communications
shall be confirmed by the Customer by tested telex or writing in the manner set
forth in clause (i) above, but the lack of such confirmation shall in no way
affect any action taken by the Custodian in reliance upon such oral instructions
prior to the Custodian's receipt of such confirmation. Instructions may relate
to specific transactions or to types or classes of transactions, and may be in
the form of standing instructions.
The Custodian shall have the right to assume in the absence of notice to
the contrary from the Customer that any person whose name is on file with the
Custodian pursuant to this Section has been authorized by the Customer to give
the Instructions in question and that such authorization has not been revoked.
The Custodian may act upon and conclusively rely on, without any liability to
the Customer or any other person or entity for any losses resulting therefrom,
any Instructions reasonably believed by it to be furnished by the proper person
or persons as provided above.
16. STANDARD OF CARE. The Custodian shall be responsible for the
performance of only such duties as are set forth herein or contained in
Instructions given to the Custodian which are not contrary to the provisions of
this Agreement. The Custodian will use reasonable care with respect to the
safekeeping of Property in the Account and, except as otherwise expressly
provided herein, in carrying out its obligations under this Agreement. So long
as and to the extent that it has exercised reasonable care, the Custodian shall
not be responsible for the title, validity or genuineness of any Property or
other property or evidence of title thereto received by it or delivered by it
pursuant to this Agreement and shall be held harmless in acting upon, and may
conclusively rely on, without liability for any loss resulting therefrom, any
notice, request, consent, certificate or other instrument reasonably believed by
it to be genuine and to be signed or furnished by the proper party or parties,
including, without limitation, Instructions, and shall be indemnified by the
Customer for any losses, damages, costs and expenses (including, without
limitation, the fees and expenses of counsel) incurred by the Custodian and
arising out of action taken or omitted with reasonable care by the Custodian
hereunder or under any Instructions. The Custodian shall be liable to the
Customer for any act or omission to act of any Subcustodian to the same extent
as if the Custodian committed such act itself. With respect to a Securities
System, the Custodian shall only be responsible or liable for
-9-
losses arising from employment of such Securities System caused by the
Custodian's own failure to exercise reasonable care. In the event of any loss to
the Customer by reason of the failure of the Custodian or a Subcustodian to
utilize reasonable care, the Custodian shall be liable to the Customer to the
extent of the Customer's actual damages at the time such loss was discovered
without reference to any special conditions or circumstances. In no event shall
the Custodian be liable for any consequential or special damages. The Custodian
shall be entitled to rely, and may act, on advice of counsel (who may be counsel
for the Customer) on all matters and shall be without liability for any action
reasonably taken or omitted pursuant to such advice.
In the event the Customer subscribes to an electronic on-line service and
communications system offered by the Custodian, the Customer shall be fully
responsible for the security of the Customer's connecting terminal, access
thereto and the proper and authorized use thereof and the initiation and
application of continuing effective safeguards with respect thereto and agree to
defend and indemnify the Custodian and hold the Custodian harmless from and
against any and all losses, damages, costs and expenses (including the fees and
expenses of counsel) incurred by the Custodian as a result of any improper or
unauthorized use of such terminal by the Customer or by any others.
All collections of funds or other property paid or distributed in respect
of Securities in the Account, including funds involved in third-party foreign
exchange transactions, shall be made at the risk of the Customer.
Subject to the exercise of reasonable care, the Custodian shall have no
liability for any loss occasioned by delay in the actual receipt of notice by
the Custodian or by a Subcustodian of any payment, redemption or other
transaction regarding Securities in the Account in respect of which the
Custodian has agreed to take action as provided in Section 3 hereof. The
Custodian shall not be liable for any loss resulting from, or caused by, or
resulting from acts of governmental authorities (whether de jure or de facto),
including, without limitation, nationalization, expropriation, and the
imposition of currency restrictions; devaluations of or fluctuations in the
value of currencies; changes in laws and regulations applicable to the banking
or securities industry; market conditions that prevent the orderly execution of
securities transactions or affect the value of Property; acts of war, terrorism,
insurrection or revolution; strikes or work stoppages; the inability of a local
clearing and settlement system to settle transactions for reasons beyond the
control of the Custodian or hurricane, cyclone, earthquake, volcanic eruption,
nuclear fusion, fission or radioactivity, or other acts of God.
The Custodian shall have no liability in respect of any loss, damage or
expense suffered by the Customer, insofar as such loss, damage or expense arises
from the performance of the Custodian's duties hereunder by reason of the
Custodian's reliance upon records that were maintained for the Customer by
entities other than the Custodian prior to the Custodian's employment under this
Agreement.
The provisions of this Section shall survive termination of this Agreement.
17. INVESTMENT LIMITATIONS AND LEGAL OR CONTRACTUAL RESTRICTIONS OR
REGULATIONS. The Custodian shall not be liable to the Customer and the Customer
agrees to indemnify the Custodian and its nominees, for any loss, damage or
expense suffered or incurred by the Custodian or its nominees arising out of any
violation of any investment restriction or other restriction or limitation
applicable to the Customer pursuant to any contract or any law or regulation.
The provisions of this Section shall survive termination of this Agreement.
18. FEES AND EXPENSES. The Customer agrees to pay to the Custodian such
compensation for its services pursuant to this Agreement as may be mutually
agreed upon in writing from time to time and the Custodian's reasonable
out-of-pocket or incidental expenses in connection with the performance of this
Agreement,
-10-
including (but without limitation) legal fees as described herein and/or deemed
necessary in the judgment of the Custodian to keep safe or protect the Property
in the Account. The initial fee schedule is attached hereto as Exhibit B. Such
fees will not be abated by, nor shall the Custodian be required to account for,
any profits or commissions received by the Custodian in connection with its
provision of custody services under this Agreement. The Customer hereby agrees
to hold the Custodian harmless from any liability or loss resulting from any
taxes or other governmental charges, and any expense related thereto, which may
be imposed, or assessed with respect to any Property in the Account and also
agrees to hold the Custodian, its Subcustodians, and their respective nominees
harmless from any liability as a record holder of Property in the Account. The
Custodian is authorized to charge the Account for such items and the Custodian
shall have a lien on the Property in the Account for any amount payable to the
Custodian under this Agreement, including but not limited to amounts payable
pursuant to Section 13 and pursuant to indemnities granted by the Customer under
this Agreement. The provisions of this Section shall survive the termination of
this Agreement.
19. TAX RECLAIMS. With respect to withholding taxes deducted and which may
be deducted from any income received from any Property in the Account, the
Custodian shall perform such services with respect thereto as are described in
Exhibit C attached hereto and shall in connection therewith be subject to the
standard of care set forth in such Exhibit C. Such standard of care shall not be
affected by any other term of this Agreement.
20. AMENDMENT, MODIFICATIONS, ETC. No provision of this Agreement may be
amended, modified or waived except in a writing signed by the parties hereto. No
waiver of any provision hereto shall be deemed a continuing waiver unless it is
so designated. No failure or delay on the part of either party in exercising any
power or right under this Agreement operates as a waiver, nor does any single or
partial exercise of any power or right preclude any other or further exercise
thereof or the exercise of any other power or right.
21. TERMINATION. This Agreement may be terminated by the Customer or the
Custodian by ninety (90) days' written notice to the other; PROVIDED that notice
by the Customer shall specify the names of the persons to whom the Custodian
shall deliver the Securities in the Account and to whom the Cash in the Account
shall be paid. If notice of termination is given by the Custodian, the Customer
shall, within ninety (90) days following the giving of such notice, deliver to
the Custodian a written notice specifying the names of the persons to whom the
Custodian shall deliver the Securities in the Account and to whom the Cash in
the Account shall be paid. In either case, the Custodian will deliver such
Property to the persons so specified, after deducting therefrom any amounts
which the Custodian determines to be owed to it hereunder. In addition, the
Custodian may in its discretion withhold from such delivery such Property as may
be necessary to settle transactions pending at the time of such delivery. The
Customer grants to the Custodian a lien and right of setoff against the Account
and all Property held therein from time to time in the full amount of the
foregoing obligations. If within ninety (90) days following the giving of a
notice of termination by the Custodian, the Custodian does not receive from the
Customer a written notice specifying the names of the persons to whom the
Custodian shall deliver the Securities in the Account and to whom the Cash in
the Account shall be paid, the Custodian, at its election, may deliver such
Securities and pay such Cash to a bank or trust company doing business in the
State of New York to be held and disposed of pursuant to the provisions of this
Agreement, or may continue to hold such Securities and Cash until a written
notice as aforesaid is delivered to the Custodian, provided that the Custodian's
obligations shall be limited to safekeeping.
22. NOTICES. Except as otherwise provided in this Agreement, all requests,
demands or other communications between the parties or notices in connection
herewith (a) shall be in writing, hand delivered or sent by registered mail,
telex or facsimile addressed to such other address as shall have been furnished
by the receiving party pursuant to the provisions hereof and (b) shall be deemed
effective when received, or, in the case of a telex, when sent to the proper
number and acknowledged by a proper answer back.
-11-
23. SECURITY FOR PAYMENT. To secure payment of all obligations due
hereunder, the Customer hereby grants to the Custodian a continuing security
interest in and right of setoff against the Account and all Property held
therein from time to time in the full amount of such obligations. Should the
Customer fail to pay promptly any amounts owed hereunder, the Custodian shall be
entitled to use available Cash in the Account, and to dispose of Securities in
the Account as is necessary. In any such case and without limiting the
foregoing, the Custodian shall be entitled to take such other actions or
exercise such other options, powers and rights as the Custodian now or hereafter
has as a secured creditor under the New York UCC or any other applicable law.
24. REPRESENTATIONS AND WARRANTIES.
(a) The Customer hereby represents and warrants to the Custodian that:
(i) the employment of the Custodian and the allocation of fees,
expenses and other charges to the Account as herein provided, is not prohibited
by law or any governing documents or contracts to which it is subject;
(ii) the terms of this Agreement do not violate any obligation by
which it is bound, whether arising by contract, operation of law or otherwise;
(iii) this Agreement has been duly authorized by appropriate action
and when executed and delivered will be binding upon it in accordance with its
terms; and
(iv) it will deliver to the Custodian a duly executed Secretary's
Certificate in the form of Exhibit D attached hereto or such other evidence of
such authorization as the Custodian may reasonably require, whether by way of a
certified resolution or otherwise.
(b) The Custodian hereby represents and warrants to the Customer that:
(i) the terms of this Agreement do not violate any obligation by which
it is bound, whether arising by contract, operation of law or otherwise;
(ii) this Agreement has been duly authorized by appropriate action and
when executed and delivered will be binding upon it in accordance with its
terms;
(iii) it will deliver to the Customer such evidence of such
authorization as the Customer may reasonably require, whether by way of a
certified resolution or otherwise; and
(iv) Custodian is qualified as a custodian under Section 26(a) of the
1940 Act and warrants that it will remain so qualified or upon ceasing to be so
qualified shall promptly notify the Customer in writing.
25. GOVERNING LAW AND SUCCESSORS AND ASSIGNS. This Agreement shall be
governed by the law of the State of New York and shall not be assignable by
either party, but shall bind the successors in interest of the Customer and the
Custodian.
26. PUBLICITY. Customer shall furnish to Custodian in accordance with
Section 22 above, prior to any distribution thereof, copies of any material
prepared for distribution to any persons who are not parties hereto that
-12-
refer in any way to the Custodian. Customer shall not distribute or permit the
distribution of such materials if Custodian reasonably objects in writing within
ten (10) business days of receipt thereof (or such other time as may be mutually
agreed) after receipt thereof. The provisions of this Section shall survive the
termination of this Agreement.
27. SUBMISSION TO JURISDICTION. Any suit, action or proceeding arising out
of this Agreement may be instituted in any State or Federal court sitting in the
City of Xxx Xxxx, Xxxxx xx Xxx Xxxx, Xxxxxx Xxxxxx of America, and the Customer
irrevocably submits to the non-exclusive jurisdiction of any such court in any
such suit, action or proceeding and waives, to the fullest extent permitted by
law, any objection which it may now or hereafter have to the laying of venue of
any such suit, action or proceeding brought in such a court and any claim that
such suit, action or proceeding was brought in an inconvenient forum.
28. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or more counterparts have been signed and delivered by
each of the parties hereto.
29. CONFIDENTIALITY. The parties hereto agree that each shall treat
confidentially the terms and conditions of this Agreement and all information
provided by each party to the other regarding its business and operations. All
confidential information provided by a party hereto shall be used by any other
party hereto solely for the purpose of rendering services pursuant to this
Agreement and, except as may be required in carrying out this Agreement, shall
not be disclosed to any third party without the prior consent of such providing
party. The foregoing shall not be applicable to any information that is publicly
available when provided or thereafter becomes publicly available other than
through a breach of this Agreement, or that is required or requested to be
disclosed by any bank or other regulatory examiner of the Custodian, Customer,
or any Subcustodian, any auditor of the parties hereto, by judicial or
administrative process or otherwise by applicable law or regulation. The
provisions of this Section shall survive the termination of this Agreement.
30. SEVERABILITY. If any provision of this Agreement is determined to be
invalid or unenforceable, such determination shall not affect the validity or
enforceability of any other provision of this Agreement.
31. ENTIRE AGREEMENT. This Agreement together with any Exhibits attached
hereto, contains the entire agreement between the parties relating to the
subject matter hereof and supersedes any oral statements and prior writings with
respect thereto.
32. HEADINGS. The headings of the paragraphs hereof are included for
convenience of reference only and do not form a part of this Agreement.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
-13-
33. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or more counterparts have been signed and delivered by
each of the parties hereto.
IN WITNESS WHEREOF, each of the parties has caused its duly authorized
signatories to execute this Agreement as of the date first written above.
ADVANTUS INTERNATIONAL BALANCED FUND, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
BANKERS TRUST COMPANY
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
-14-
EXHIBIT A
To Custodian Agreement dated as of March 1, 2000 between Bankers Trust
Company and Advantus International Balanced Fund, Inc.
PROXY SERVICE
The following is a description of the Proxy Service referred to in Section
10 of the above referred to Custodian Agreement. Terms used herein as defined
terms shall have the meanings ascribed to them therein unless otherwise defined
below.
The Custodian provides a service, described below, for the transmission of
corporate communications in connection with shareholder meetings relating to
Securities held in the countries specified in the applicable Service Standards.
For the United States and Canada, the term "corporate communications" means the
proxy statements or meeting agenda, proxy cards, annual reports and any other
meeting materials received by the Custodian. For countries other than the United
States and Canada, the term "corporate communications" means the meeting agenda
only and does not include any meeting circulars, proxy statements or any other
corporate communications furnished by the issuer in connection with such
meeting. Non-meeting related corporate communications are not included in the
transmission service to be provided by the Custodian except upon request as
provided below.
The Custodian's process for transmitting and translating meeting agendas
will be as follows:
1) If the meeting agenda is not provided by the issuer in the English
language, and if the language of such agenda is in the official
language of the country in which the related security is held, the
Custodian will as soon as practicable after receipt of the original
meeting agenda by a Subcustodian provide an English translation
prepared by that Subcustodian.
2) If an English translation of the meeting agenda is furnished, the
local language agenda will not be furnished unless requested.
Translations will be free translations and neither the Custodian nor any
Subcustodian will be liable or held responsible for the accuracy thereof or any
direct or indirect consequences arising therefrom, including without limitation
arising out of any action taken or omitted to be taken based thereon.
If requested, the Custodian will, on a reasonable efforts basis, endeavor
to obtain any additional corporate communication such as annual or interim
reports, proxy statements, meeting circulars, or local language agendas, and
provide them in the form obtained.
Timing in the voting process is important and, in that regard, upon receipt
by the Custodian of notice from a Subcustodian, the Custodian will provide a
notice to the Customer indicating the deadline for receipt of its instructions
to enable the voting process to take place effectively and efficiently. As
voting procedures will vary from market to market, attention to any required
procedures will be very important. Upon timely receipt of voting instructions,
the Custodian will promptly forward such instructions to the applicable
Subcustodian. If voting instructions are not timely received, the Custodian
shall have no liability or obligation to take any action.
-15-
For Securities held in markets other than those set forth in the first
paragraph, the Custodian will not furnish the material described above or seek
voting instructions. However, if requested to exercise voting rights at a
specific meeting, the Custodian will endeavor to do so on a reasonable efforts
basis without any assurance that such rights will be so exercised at such
meeting.
If the Custodian or any Subcustodian incurs extraordinary expenses in
exercising voting rights related to any Securities pursuant to appropriate
instructions or direction (e.g., by way of illustration only and not by way of
limitation, physical presence is required at a meeting and/or travel expenses
are incurred), such expenses will be reimbursed out of the Account unless other
arrangements have been made for such reimbursement.
It is the intent of the Custodian to expand the Proxy Service to include
jurisdictions which are not currently included as set forth in the applicable
Service Standards. The Custodian will notify the Customer as to the inclusion of
additional countries or deletion of existing countries after their inclusion or
deletion and this Exhibit A will be deemed to be automatically amended to
include or delete such countries as the case may be.
-16-
EXHIBIT B
To Custodian Agreement dated as of March 1, 2000 between Bankers Trust
Company and Advantus International Balanced Fund, Inc.
CUSTODY FEE SCHEDULE
Portfolio Fee (per Global Custody account): $200.00 per month
ANNUAL CHARGE ON ASSETS:
---------------------------------------------------------------------------------------
COUNTRY TRANSACTION CHARGES ASSET BASED FEE (IN BASIS POINTS)
---------------------------------------------------------------------------------------
Argentina $150 40.0
Australia $50 5.0
Austria $75 5.0
Bangladesh $150 40.0
Belgium $60 5.0
Botswana $150 50.0
Brazil $100 40.0
Canada $20 3.0
Chile $100 30.0
China $75 30.0
Colombia $100 35.0
Czech Rep $70 20.0
Denmark $50 5.0
Ecuador $100 45.0
Egypt $80 45.0
Finland $100 15.0
France $50 5.0
Germany $30 3.0
Ghana $150 50.0
Greece $120 40.0
Hong Kong $30 7.0
Hungary $150 45.0
India (Physical) $200 60.0
India (Dematerialized) $140 25.0
Indonesia $35 8.0
Ireland $50 5.0
Israel $100 40.0
Italy $50 3.0
Cedel/Euroclear $20 2.5
Japan $35 3.0
Jordan $100 30.0
Kenya $150 50.0
-17-
Korea $50 15.0
Luxembourg $60 5.0
Malaysia $50 7.0
Mauritius $140 50.0
Mexico $30 7.0
Morocco $130 30.0
Netherlands $45 5.0
New Zealand $50 5.0
Norway $50 5.0
Pakistan $150 30.0
Peru $100 50.0
Philippines $30 8.0
Poland $100 45.0
Portugal $100 15.0
Russia $300 50.0
Singapore $50 7.0
Slovakia $100 25.0
South Africa $30 3.0
Spain $50 7.0
Sri Lanka $60 12.0
Sweden $50 5.0
Switzerland $60 5.0
Taiwan $100 15.0
Thailand $100 7.0
Tunisia $50 45.0
Turkey $100 30.0
U.K. $15 3.0
U.S. $15 0.3
Venezuela $100 35.0
Zambia $150 50.0
Zimbabwe $150 50.0
NOTES
- The standard Global Custody services includes: asset safekeeping, trade
settlement, income collection, corporate action processing (including proxy
voting) and tax reclaims (where appropriate refer to policy statements for
further clarification).
- All income receipts and tax reclaim refunds are credited to client accounts
net of agents' collection fees (where applicable).
- There is no cost associated with the inward transition of assets but the
client is responsible for all re-registration charges; United Kingdom (if
change in beneficial owner), Spain, Russia and Indonesia.
Third party FX transactions and other cash movements, with no associated
security transaction (e.g. free payments/receipts) are charged at $10 per U.S.
wire and $25 per non U.S. wire. No transaction fee is levied for FX transactions
executed with Bankers Trust.
-18-
Global Custody Fees will be billed monthly in arrears.
This Exhibit B shall be amended upon delivery by the Custodian of a new Exhibit
B to the Customer and acceptance thereof by the Customer and shall be effective
as of the date of acceptance by the Customer or a date agreed upon between the
Custodian and the Customer.
Dated as of:
ADVANTUS INTERNATIONAL BALANCED FUND, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
BANKERS TRUST COMPANY
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
-19-
EXHIBIT C
To Custodian Agreement dated as of March 1, 2000 between Bankers Trust
Company and Advantus International Balanced Fund, Inc.
TAX RECLAIMS
Pursuant to Section 19 of the above referred to Custodian Agreement, the
Custodian shall perform the following services with respect to withholding taxes
imposed or which may be imposed on income from Property in the Account in the
countries specified in the applicable Service Standards. Terms used herein as
defined terms shall unless otherwise defined have the meanings ascribed to them
in the above referred to Custodian Agreement.
When withholding tax has been deducted with respect to income from any
Property in an Account, the Custodian will actively pursue on a reasonable
efforts basis the reclaim process, PROVIDED THAT the Custodian shall not be
required to institute any legal or administrative proceeding against any
Subcustodian or other person. The Custodian will provide fully detailed
advices/vouchers to support reclaims submitted to the local authorities by the
Custodian or its designee. In all cases of withholding, the Custodian will
provide full details to the Customer. If exemption from withholding at the
source can be obtained in the future, the Custodian will notify the Customer and
advise what documentation, if any, is required to obtain the exemption. Upon
receipt of such documentation from the Customer, the Custodian will file for
exemption on the Customer's behalf and notify the Customer when it has been
obtained.
In connection with providing the foregoing service, the Custodian shall be
entitled to apply categorical treatment of the Customer according to the
Customer's nationality, the particulars of its organization and other relevant
details that shall be supplied by the Customer. It shall be the duty of the
Customer to inform the Custodian of any change in the organization, domicile or
other relevant fact concerning tax treatment of the Customer and further to
inform the Custodian if the Customer is or becomes the beneficiary of any
special ruling or treatment not applicable to the general nationality and
category or entity of which the Customer is a part under general laws and treaty
provisions. The Custodian may rely on any such information provided by the
Customer.
In connection with providing the foregoing service, the Custodian may also
rely on professional tax services published by a major international accounting
firm and/or advice received from a Subcustodian in the jurisdictions in
question. In addition, the Custodian may seek the advice of counsel or other
professional tax advisers in such jurisdictions. The Custodian is entitled to
rely, and may act, on information set forth in such services and on advice
received from a Subcustodian, counsel or other professional tax advisers and
shall be without liability to the Customer for any action reasonably taken or
omitted pursuant to information contained in such services or such advice.
-20-
EXHIBIT D
ADVANTUS INTERNATIONAL BALANCED FUND, INC.
CERTIFICATE OF THE SECRETARY
I, _____________________ [NAME OF SECRETARY], hereby certify that I am
the Secretary of [NAME OF ENTITY], a ______________________[TYPE OF ENTITY]
organized under the laws of ________________________[JURISDICTION] (the
"Customer"), and as such I am duly authorized to, and do hereby, certify that:
1. Good Standing. The Customer's organizational documents, and all
amendments thereto, have been filed with the appropriate governmental officials
of _____________________[JURISDICTION], the Customer continues to be in
existence and is in good standing, and no action has been taken to repeal such
organizational documents, the same being in full force and effect on the date
hereof.
2. Organizational Documents. The Customer's [NAME OF ORGANIZATIONAL
DOCUMENTS - I.E., BYLAWS, ARTICLES OF INCORPORATION, ETC.] have been duly
adopted and no action has been taken to repeal such [NAME OF ORGANIZATIONAL
DOCUMENTS], the same being in full force and effect.
3. RESOLUTIONS. Resolutions have been duly adopted on behalf of the
Customer, which resolutions (i) have not in any way been revoked or rescinded,
(ii) have been in full force and effect since their adoption, to and including
the date hereof, and are now in full force and effect, and (iii) are the only
corporate proceedings of the Customer now in force relating to or affecting the
matters referred to therein, including, without limitation, confirming that the
Customer is duly authorized to appoint Bankers Trust Company as Custodian of
assets delivered to it by the Customer and enter into a certain custody
agreement with Bankers Trust Company (the "Agreement") setting forth the terms
and conditions of such appointment, and that certain designated officers,
including those identified in paragraph 4 of this Certificate, are authorized to
(a) execute said Agreement in such form as the officers executing the same have
approved, such approval to be conclusively evidenced by their execution and
delivery thereof, and (b) execute any instructions in connection with the
Agreement, in conformity with the requirements of the Customer's [NAME OF
ORGANIZATIONAL DOCUMENTS], and other pertinent documents to which the Customer
may be bound.
4. INCUMBENCY. The following named individuals are duly elected (or
appointed), qualified and acting officers of the Customer holding those offices
set forth opposite their respective names as of the date hereof, each having
full authority, acting individually, to bind the Customer, as a legal matter,
with respect to all matters pertaining to the Agreement, and to execute and
deliver said Agreement on behalf of the Customer, and the signatures set forth
opposite the respective names and titles of said officers are their true,
authentic signatures:
NAME TITLE SIGNATURE
-------------------- -------------------- --------------------
-------------------- -------------------- --------------------
-21-
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of
_______________[DATE], 2000.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Secretary
I, __________________________[NAME OF CONFIRMING OFFICER],
__________________[TITLE] of the Customer, hereby certify that on this ___ day
of _______________[DATE], 20__, _____________________[NAME OF SECRETARY] is the
duly elected Secretary of the Customer and that the signature above is his/her
genuine signature.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
-22-
EXHIBIT E
CASH MANAGEMENT ADDENDUM (this "ADDENDUM") to the CUSTODIAN AGREEMENT
(the "AGREEMENT") between BANKERS TRUST COMPANY (the "CUSTODIAN") and ADVANTUS
INTERNATIONAL BALANCED FUND, INC. (the "CUSTOMER").
WHEREAS, the Custodian will provide cash management services to the
Customer, and the Custodian and the Customer desire to confirm their
understanding with respect to such services;
NOW, THEREFORE, the Custodian and the Customer agree as follows:
1. Until the Custodian receives Instructions to the contrary, the
Custodian will (a) hold with Subcustodians, in deposit accounts maintained for
the benefit of the Custodian's clients, all Cash received for the Account, (b)
credit such interest, if any, on Cash in the Account as the Custodian shall from
time to time determine and (c) receive compensation out of any amounts paid by
Subcustodians in respect of Cash in the Account.
2. The Custodian may (on an overnight or other short-term basis) move
certain, or all, currencies of Cash in the Account from any Subcustodian and
place it, as deposits or otherwise, with one or more other Subcustodians
(including branches and affiliates of the Custodian). The Custodian will notify
the Customer of any placement procedures it implements and will move Cash in
accordance with such procedures until it notifies the Customer otherwise or
receives Instructions to the contrary. The Custodian may credit interest and
receive compensation as described in 1 above with respect to any Cash moved. If
any Cash is held in an investment fund managed by Bankers Trust, it will notify
the fund (as opposed to the Customer) as provided herein with respect to such
Cash.
3. The Customer acknowledges that it has received and reviewed the
current policies of the Custodian regarding cash management services, which are
attached to this Addendum.
4. To the extent any of the Property or Cash in the Account is subject
to the Employee Retirement Income Security Act of 1974, the Customer (a)
represents and warrants that it, at all times during the duration of the
Agreement, will be a qualified professional asset manager as defined in the
prohibited transaction exemption 84-14 and that the provisions of the exemption
apply to the Agreement (and transactions thereunder) and (b) agrees to maintain
such records as are necessary to comply with the exemption or to enable
interested persons to determine that the conditions of the exemption are met.
5. Capitalized terms used but not defined in this Addendum are used
with the respective meanings assigned to them in the Agreement.
-23-
IN WITNESS WHEREOF, this Addendum has been executed as of the date of
the Agreement.
BANKERS TRUST COMPANY
By:
------------------------------------
ADVANTUS INTERNATIONAL BALANCED FUND, INC.
By:
------------------------------------
-24-
GLOBAL CUSTODY CASH MANAGEMENT PROGRAM
In the Global Custody cash management program, currencies on which
Bankers Trust pays interest are divided into two categories: (1) currencies on
which we pay interest based on a market benchmark rate for overnight deposits,
and (2) currencies on which we pay interest based on a rate paid by the London
branch of Bankers Trust Company or the local subcustodian.
CURRENCIES ON WHICH WE PAY INTEREST BASED ON A MARKET BENCHMARK RATE
FOR OVERNIGHT DEPOSITS (WHICH WE CALL "BENCHMARK RATE CURRENCIES"):
- For each of these currencies, the interest rate we pay is based on a
specific market benchmark (such as Effective Fed Funds) and is
calculated by taking an average of the benchmark rate and subtracting
a spread. (See Schedule A)
- Currently, the only Benchmark Rate Currency is the U.S. Dollar. Over
time we will be considering additional currencies to include in this
category.
- Operationally, most balances in Benchmark Rate Currencies are swept
overnight into deposits at the London branch of Bankers Trust Company.
Where you have selected a short-term investment fund, your U.S. Dollar
balances in the U.S. will be swept overnight in accordance with your
instructions.
CURRENCIES ON WHICH WE PAY INTEREST BASED ON A RATE PAID BY THE LONDON
BRANCH OF BANKERS TRUST COMPANY OR THE LOCAL SUBCUSTODIAN (WHICH WE CALL "BASE
RATE CURRENCIES"):
- For each of these currencies, the interest rate we pay is based on the
rate paid by the London branch or the local subcustodian on overnight
deposits in the currency. In either case, interest is calculated by
using the overnight rate (which will be the actual overnight, a weekly
average, or monthly average rate, depending on the currency) and
subtracting a spread. (See Schedule A)
- Currencies that are part of the sweep program will earn interest based
on the base rate, which will be the higher of the rate offered by the
London branch of Bankers Trust Company or the local subcustodian.
- Currencies that are not part of the sweep program will generally earn
interest based on the rate paid by the local subcustodian. We may at
times be able to sweep certain currency balances into deposits of
Bankers Trust Company's London branch in order to be able to earn a
higher rate for you. On those days, any such currency will be treated
as part of the sweep program, and you will earn interest on all of
your balances in that currency at the higher rate for that day.
- Currently, there are 29 Base Rate Currencies, 10 of which are included
in our sweep program to the London branch.
-25-
- Operationally, most balances in Base Rate Currencies that are part of
our sweep program are swept overnight into deposits at the London
branch, while balances in Base Rate Currencies that are not part of
our sweep program remain with the local subcustodian.
FOR EACH CURRENCY ON WHICH WE PAY INTEREST:
- We will notify you periodically in writing of changes in spreads and
updates to the cash management program. These program updates also
will be available through Global Custody Flash Notices.
- FOR MARKETS WHERE WE MAINTAIN ONE OR MORE OMNIBUS CASH ACCOUNTS, YOU
EARN INTEREST AT THE CALCULATED RATE ON YOUR ENTIRE CONTRACTUAL
BALANCE WITHOUT ANY ACTION ON YOUR PART AND WITHOUT ANY MINIMUM
BALANCE REQUIREMENTS. This is the case regardless of whether we are
able to invest your balances at or near the applicable benchmark or
base rate and regardless of whether your contractual balance may
exceed your actual balance.
- FOR MARKETS WHERE WE MAINTAIN ONE OR MORE OMNIBUS CASH ACCOUNTS, THE
MINIMUM RATE PAID IS 0.50%, except for the Japanese Yen (for which the
minimum rate of 0.05% has been suspended for the time being due to
market conditions) and the Singapore Dollar (for which the minimum
rate is 0.25%). Please note that this is also subject to change as
appropriate for any currency. Notwithstanding the foregoing, in no
event will interest be negative.
- FOR THE CURRENCIES OF "CLIENT SPECIFIC MARKETS," THOSE MARKETS WHERE
FOR REGULATORY OR OTHER REASONS WE DO NOT MAINTAIN OMNIBUS ACCOUNTS
FOR CLIENT CASH, ON WHICH WE PAY CREDIT INTEREST (which at this time
are the Hungarian Forint, Israeli Shekel, Polish Zloty, Korean Won and
Taiwanese Dollar), we will no longer be taking a spread for providing
interest on cash balances. The credit interest you earn on overnight
balances will be based on actual balances, as opposed to contractual
balances, and the minimum credit interest rate will no longer be
applied.
- YOU WILL HAVE CONTINUOUS ACCESS THROUGH GLOBE*VIEW, BTWORLD, OR
GLOBE*LINK OR OTHER AGREED ELECTRONIC ON-LINE SYSTEM TO THE INTEREST
RATE EARNED DURING THE PREVIOUS "RATE AVERAGING PERIOD". Because we
may use weekly or monthly average rates to calculate the interest you
earn, we do not know the actual interest rate until the weekly or
monthly period is completed.
-26-
- Our program generally requires that overnight balances in each
currency remain with (or are swept to) a subcustodian we designate for
that currency. Nevertheless, we pay our stated rate of interest on any
balances that, because of transactions in your account, are held
overnight with an alternate subcustodian if we receive interest on
that currency from that subcustodian. If the alternate subcustodian
does not pay interest, however, these balances are excluded from our
program.
- FOR SWEPT CURRENCIES, FROM TIME TO TIME WE MAY NOT BE ABLE TO SWEEP
THE FULL AMOUNT OF YOUR BALANCES TO THE LONDON BRANCH because of
operational constraints or because your balance on a contractual basis
temporarily exceeds your actual balance. You will, however, always
receive credit for interest based on your entire contractual balance.
To the extent you would have earned a lower rate on balances not
swept, we will make up the difference. To the extent that actual
balances are higher than contractually posted balances due to purchase
fails or otherwise, we will retain the interest earned as
compensation.
- THE EFFECTIVE RATE WE PAY ON OVERNIGHT BALANCES WILL GENERALLY DIFFER
FROM THE EFFECTIVE RATE WE RECEIVE (WHETHER FROM THE LONDON BRANCH OR
THE LOCAL SUBCUSTODIAN). Any difference between the effective rate we
receive and the effective rate we pay (which may be positive or
negative, but is generally positive) is kept by us and covers our fee
for running the cash management program and the related costs we
absorb.
Obviously, there will be currencies on which we will not pay interest
because of local regulations, insufficient scale, or other reasons. However, we
hope to identify additional currencies where we can begin paying interest and we
will announce those to you as soon as practical.
Currently most cash balances in our overnight sweep program are swept
into deposits at the London branch of Bankers Trust Company. We reserve the
right to utilize other branches or affiliates for the overnight sweep program.
In the event of such change, we will notify you in writing, which may be through
Global Custody Flash Notice.
As you know, overdrafts are not permitted in the normal course of
business in any currency. Should they occur in any currency, your account will
be charged a fee to settle transactions in advance of receipt of funds. If the
overdraft is not promptly cured (and in any event upon the expiration of 30
days) after the investment manager has been notified of the outstanding
overdraft, the account's home currency will be used to cure the overdraft and
the associated foreign exchange will be done by Bankers Trust at market rates.
(Other currencies may be utilized to the extent the home currency is
insufficient.) Investment managers that have not cured overdrafts within such
period will be deemed to have directed such foreign exchange transaction.
Accounts subject to ERISA will be deemed to have engaged in the transaction
under the authority of the class exemptions available to qualified professional
asset managers and in-house investment managers. To the extent that the
overdraft is less than the U.S. dollar equivalent of $50,000, Bankers Trust's
foreign exchange desk will bundle the transaction with other small amounts for
other clients.
-27-
SCHEDULE A
CASH MANAGEMENT PROGRAM - GLOBAL CUSTODY
OVERNIGHT UNINVESTED CASH BALANCES
(* - Denotes currencies in sweep program)
Currencies Rates
---------- -----
Argentine Peso Base Rate less 150
Australian Dollar* Base Rate less 130
British Pound Sterling* Base Rate less 215
Canadian Dollar* Base Rate less 175
Czech Koruna Base Rate less 75
Danish Krone* Base Rate less 250
EMU Euro* Base Rate less 175
Greek Drachma Base Rate less 150
Hong Kong Dollar* Base Rate less 250
Hungarian Forint Base Rate less 0
Indonesian Rupiah Base Rate less 200
Israeli Shekel Base Rate less 0
Japanese Yen Base Rate less 75
Jordanian Dinar Base Rate less 200
Korean Won Base Rate less 0
Malaysian Ringgit (1) Base Rate less 200
Mexican Peso Base Rate less 200
New Taiwan Dollar Base Rate less 0
New Zealand Dollar Base Rate less 100
Norwegian Krone* Base Rate less 175
Philippine Peso Base Rate less 150
Polish Zloty Base Rate less 0
Singapore Dollar Base Rate less 000
Xxxxxx Koruna Base Rate less 150
South African Rand* Base Rate less 250
Swedish Krona* Base Rate less 250
Swiss Franc* Base Rate less 100
Thai Baht Base Rate less 200
Turkish Lira Base Rate less 200
U.S. Dollar* Effective Fed Funds less 100 (2)
We reserve the right, in our sole discretion, to adjust the base rates and
benchmark rates used and the spreads charged at any time and for any
reason. We will notify you periodically in writing of changes in spreads
and updates to the cash management program. These program updates also will
be available through Global Custody Flash Notices.
(1) As a result of the new rules recently introduced by local Malaysia
regulators, we have suspended paying interest on Ringgit balances. Should the
situation change, we will notify you via Flash Notice.
(2) Not applicable if U.S. Dollars are swept to a short-term investment fund.
-28-
