EXHIBIT (g).2
GLOBAL CUSTODY AGREEMENT
This AGREEMENT is effective April 22, 1999, and is among THE CHASE
MANHATTAN BANK ("Bank"), FIRSTAR TRUST COMPANY ("Customer"). and IAI Balanced
Fund ("the Fund").
1. CUSTOMER ACCOUNTS.
Bank, acting as "Securities Intermediary" (as defined in Section 15(g)
hereof) shall establish and maintain the following accounts ("Accounts"): (a) a
Custody Account (as defined in Section 15(b) hereof) in the name of Customer on
behalf of Fund for any and all Financial Assets, which shall, except as modified
by Section 15(d) hereof, mean stocks, shares, bonds, debentures, notes,
mortgages or other obligations for the payment of money, bullion, coin and any
certificates, receipts, warrants or other instruments representing rights to
receive, purchase or subscribe for the same or evidencing or representing any
other rights or interests therein and other similar property whether
certificated or uncertificated as may be received by Bank or its Subcustodian
(as defined in Section 3 hereof) for the account of Customer on behalf of Fund,
including as an "Entitlement Holder" as defined in Section 15(c) hereof); and
(b) an account in the name of Customer ("Deposit Account") for any and
all cash in any currency received by Bank or its Subcustodian for the account of
Customer on behalf of Fund, which cash shall not be subject to withdrawal by
draft or check.
Customer warrants its authority to: 1) deposit the cash and Financial
Assets (collectively "Assets") received in the Accounts and 2) give Instructions
(as defined in Section 11 hereof) concerning the Accounts. Bank may deliver
Financial Assets of the same class in place of those deposited in the Custody
Account.
Upon written agreement among Bank, Company and Customer, additional
Accounts may be established and separately accounted for as additional Accounts
hereunder.
2. MAINTENANCE OF FINANCIAL ASSETS AND CASH AT BANK AND SUBCUSTODIAN
LOCATIONS.
Unless Instructions specifically require another location
acceptable to Bank:
(a) Financial Assets shall be held in the country or other jurisdiction
in which the principal trading market for such Financial Assets is located,
where such Financial Assets are to be presented for payment or where such
Financial Assets are acquired; and
(b) Cash shall be credited to an account in a country or other
jurisdiction in which such cash may be legally deposited or is the legal
currency for the payment of public or private debts.
Cash may be held pursuant to Instructions in either interest or
non-interest bearing accounts as may be available for the particular currency.
To the extent Instructions are issued and Bank can comply with such
Instructions, Bank is authorized to maintain cash balances on deposit for
Customer on behalf of Fund with itself or one of its "Affiliates" at such
reasonable rates of interest as may from time to time be paid on such accounts,
or in non-interest bearing accounts as Customer on behalf of Fund may direct, if
acceptable to Bank. For purposes hereof, the term "Affiliate" shall mean an
entity controlling, controlled by, or under common control with, Bank.
If Customer wishes to have any of its Assets held in the custody of an
institution other than the established Subcustodians as defined in Section 3 (or
their securities depositories), such arrangement must be authorized by a written
agreement, signed by Bank, Customer and Customer.
3. SUBCUSTODIANS AND SECURITIES DEPOSITORIES.
Bank may act hereunder through the subcustodians listed in Schedule A
hereof with which Bank has entered into subcustodial agreements
("Subcustodians"). Customer and Company authorize Bank to hold Assets in the
Accounts in accounts which Bank has established with one or more of its branches
or Subcustodians. Bank and Subcustodians are authorized to hold any of Financial
Assets in their account with any securities depository in which they
participate.
Bank reserves the right to add new, replace or remove Subcustodians.
Customer and Company shall be given reasonable notice by Bank of any amendment
to Schedule A. Upon request by Customer or Company, Bank shall identify the
name, address and principal place of business of any Subcustodian of Company's
Assets and the name and address of the governmental agency or other regulatory
authority that supervises or regulates such Subcustodian.
4. USE OF SUBCUSTODIAN.
(a) Bank shall identify the Assets on its books as belonging to
Customer on behalf of Fund.
(b) A Subcustodian shall hold such Assets together with assets
belonging to other customers of Bank in accounts identified on such
Subcustodian's books as custody accounts for the exclusive benefit of customers
of Bank.
(c) Any Assets in the Accounts held by a Subcustodian shall be subject
only to the instructions of Bank or its agent. Any Financial Assets held in a
securities depository for the account of a Subcustodian shall be subject only to
the instructions of such Subcustodian.
(d) Any agreement Bank enters into with a Subcustodian for holding
Bank's customers' assets shall provide that such assets shall not be subject to
any right, charge, security interest, lien or claim of any kind in favor of such
Subcustodian except for safe custody or administration, and that the beneficial
ownership of such assets shall be freely transferable without the payment of
money or value other than for safe custody or administration, or, in the case of
cash deposits, except for liens or rights in favor of creditors of the
Subcustodian arising under bankruptcy, insolvency or similar laws. Where
Securities are deposited by a Subcustodian with a securities depository, Bank
shall cause the Subcustodian to identify on its books as belonging to Bank, as
agent, the Securities shown on the Subcustodian's account on the books of such
securities depository. The foregoing shall not apply to the extent of any
special agreement or arrangement made by Customer with any particular
Subcustodian.
5. DEPOSIT ACCOUNT TRANSACTIONS.
(a) Bank or its Subcustodians shall make payments from the Deposit
Account upon receipt of Instructions which include all information required by
Bank.
(b) In the event that any payment to be made under this Section 5
exceeds the funds available in the Deposit Account, Bank, in its discretion, may
advance Company such excess amount which shall be deemed a loan payable on
demand, bearing interest at the rate customarily charged by Bank on similar
loans.
(c) If Bank credits the Deposit Account on a payable date, or at any
time prior to actual collection and reconciliation to the Deposit Account, with
interest, dividends, redemptions or any other amount due, Company shall promptly
return any such amount upon oral or written notification: (i) that such amount
has not been received in the ordinary course of business or (ii) that such
amount was incorrectly credited. If Company does not promptly return any amount
upon such notification, Bank shall be entitled, upon oral or written
notification to Company, to reverse such credit by debiting the Deposit Account
for the amount previously credited. Bank shall advise Customer, Company or an
Authorized Person regarding default in the payment of principal or income on
Securities; provided that, failure to give such advice shall not render Bank
liable for any such amount. Bank or its Subcustodian shall have no duty or
obligation to institute legal proceedings, file a claim or a proof of claim in
any insolvency proceeding or take any other action with respect to the
collection of such amount, but may act for Customer upon Instructions after
consultation with Customer and Company on behalf of Fund.
6. CUSTODY ACCOUNT TRANSACTIONS.
(a) Financial Assets shall be transferred, exchanged or delivered by
Bank or its Subcustodian upon receipt by Bank of Instructions which include all
information required by Bank. Settlement and payment for Financial Assets
received for, and delivery of Financial Assets out of, the Custody Account may
be made 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, delivery of Financial Assets to a purchaser,
dealer or their agents against a receipt with the expectation of receiving later
payment and free delivery. Delivery of Financial Assets out of the Custody
Account may also be made in any manner specifically required by Instructions
acceptable to Bank.
(b) Bank, in its discretion, may credit or debit the Accounts on a
contractual settlement date with cash or Financial Assets with respect to any
sale, exchange or purchase of Financial Assets. Otherwise, such transactions
shall be credited or debited to the Accounts on the date cash or Financial
Assets are actually received by Bank and reconciled to the Account.
(i) Bank may reverse credits or debits made to the Accounts in
its discretion if the related transaction fails to settle within a
reasonable period, determined by Bank in its discretion, after the
contractual settlement date for the related transaction.
(ii) If any Financial Assets delivered pursuant to this
Section 6 are returned by the recipient thereof, Bank may reverse the
credits and debits of the particular transaction at any time.
7. ACTIONS OF BANK.
Bank shall follow Instructions received regarding Assets held in the
Accounts. However, until it receives Instructions to the contrary, Bank shall:
(a) Present for payment any Financial Assets 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 Bank or
Subcustodian is actually aware of such opportunities.
(b) Execute in the name of Company such ownership and other
certificates as may be required to obtain payments in respect of Financial
Assets.
(c) Exchange interim receipts or temporary Financial Assets for
definitive Financial Assets.
(d) Appoint brokers and agents for any transaction involving the
Financial Assets, including, without limitation, Affiliates of Bank or any
Subcustodian.
(e) Issue statements to Customer, at times mutually agreed upon,
identifying the Assets in the Accounts.
Bank shall send Customer an advice or notification of any transfers of
Assets to or from the Accounts. Such statements, advices or notifications shall
indicate the identity of the entity having custody of the Assets. Unless
Customer sends Bank a written exception or objection to any Bank statement
within ninety (90) days of receipt, Customer shall be deemed to have approved
such statement. In such event, or where Customer has otherwise approved any such
statement, Bank shall, to the extent permitted by law, be released, relieved and
discharged with respect to all matters set forth in such statement or reasonably
implied therefrom as though it had been settled by the decree of a court of
competent jurisdiction in an action where Customer and all persons having or
claiming an interest in Customer or Customer's Accounts on behalf of the Fund
were parties.
All collections of funds or other property paid or distributed in
respect of Financial Assets in the Custody Account shall be made at the risk of
Customer. Bank shall have no liability for any loss occasioned by delay in the
actual receipt of notice by Bank or by its Subcustodians of any payment,
redemption or other transaction regarding Financial Assets in the Custody
Account in respect of which Bank has agreed to take any action hereunder.
8. CORPORATE ACTIONS; PROXIES; TAX RECLAIMS.
(a) Corporate Actions. Whenever Bank receives information concerning
the Financial Assets which requires discretionary action by the beneficial owner
of the Financial Assets (other than a proxy), such as subscription rights, bonus
issues, stock repurchase plans and rights offerings, or legal notices or other
material intended to be transmitted to securities holders ("Corporate Actions"),
Bank shall: (1) give Customer prompt notice of such Corporate Actions to the
extent that
Bank's central corporate actions department has actual knowledge of a Corporate
Action in time to afford timely notice its customers; and (2) take such steps as
may reasonably be necessary to secure or otherwise prevent the loss of rights
relating to any Securities; provided that the timely monitoring of publications
typically used by custodians to monitor such actions, together with the giving
of the prompt notice referred to herein, shall fulfill Bank's obligations under
this Section 8(a).
When a rights entitlement or a fractional interest resulting from a
rights issue, stock dividend, stock split or similar Corporate Action is
received which bears an expiration date, Bank shall endeavor to obtain
Instructions from Customer or its Authorized Person (as defined in Section 10
hereof), but if Instructions are not received in time for Bank to take timely
action, or actual notice of such Corporate Action was received too late to seek
Instructions, Bank is authorized to sell such rights entitlement or fractional
interest and to credit the Deposit Account with the proceeds or take any other
action it deems, in good faith, to be appropriate in which case it shall be held
harmless for any such action.
(b) Proxy Voting. Bank shall provide proxy voting services, if elected
by Customer, in accordance with the terms of the proxy voting services rider
hereto. Proxy voting services may be provided by Bank or, in whole or in part,
by one or more third parties appointed by Bank (which may be Affiliates of
Bank).
(c) Tax Reclaims.
(i) Subject to the provisions hereof, Bank shall apply for a
reduction of withholding tax and any refund of any tax paid or tax
credits which apply in each applicable market in respect of income
payments on Financial Assets for the benefit of Customer and Company
which Bank believes may be available to such Customer.
(ii) The provision of tax reclaim services by Bank is
conditional upon Bank receiving from the beneficial owner of Financial
Assets (A) a declaration of its identity and place of residence and (B)
certain other documentation (pro forma copies of which are available
from Bank). Customer and Company acknowledge that, if Bank does not
receive such declarations, documentation and information, additional
United Kingdom taxation shall be deducted from all income received in
respect of Financial Assets issued outside the United Kingdom and that
U.S. non-resident alien tax or U.S. backup withholding tax shall be
deducted from U.S. source income. Customer and Company shall provide to
Bank such documentation and information as it may require in connection
with taxation, and warrants that, when given, this information shall be
true and correct in every respect, not misleading in any way, and
contain all material information. Customer undertakes to notify Bank
immediately if any such information requires updating or amendment.
(iii) Bank shall not be liable to Customer, the Company or any
third party for any taxes, fines or penal ties payable by Bank, Company
or Customer, and shall be indemnified by the appropriate party to this
Agreement accordingly, resulting from the inaccurate completion of
documents by Customer, Company or any third party acting as agent for
Customer or Company, or as a result of the provision to Bank or any
third party of inaccurate or misleading information or the withholding
of material information by Customer, Company or any other third party,
or as a result of any delay of any revenue authority or any other
matter beyond the control of Bank.
(iv) Customer and Company confirm that Bank is authorized to
deduct from any cash received or credited to the Deposit Account any
taxes or levies required by any revenue or governmental authority for
whatever reason in respect of the Securities or Cash Accounts.
(v) Bank shall perform tax reclaim services only with respect
to taxation levied by the revenue authorities of the countries notified
to Customer from time to time and Bank may, by notification in writing,
at its absolute discretion, supplement or amend the markets in which
the tax reclaim services are offered. Other than as expressly provided
in this sub-clause, Bank shall have no responsibility with regard to
Customer's and Company's tax position or status in any jurisdiction.
(vi) Customer confirms that Bank is authorized to disclose any
information requested by any revenue authority or any governmental body
in relation to Customer or the Financial Assets and/or Cash held for
Customer.
(vii) Tax reclaim services may be provided by Bank or, in
whole or in part, by one or more third parties appointed by Bank (which
may be Affiliates of Bank); provided that Bank shall be liable for the
performance of any such third party to the same extent as Bank would
have been if it performed such services itself.
9. NOMINEES.
Financial Assets which are ordinarily held in registered form may be
registered in a nominee name of Bank, Subcustodian or securities depository, as
the case may be. Bank may without notice to Customer or Company cause any such
Financial Assets to cease to be registered in the name of any such nominee and
to be registered in the name of Company on behalf of Fund. In the event that any
Financial Assets registered in a nominee name are called for partial redemption
by the issuer, Bank may allot the called portion to the respective beneficial
holders of such class of security in any manner Bank deems to be fair and
equitable. Customer shall hold Bank, Subcustodians, and their respective
nominees harmless from any liability arising directly or indirectly from their
status as a mere record holder of Financial Assets in the Custody Account.
10. AUTHORIZED PERSONS.
As used herein, the term "Authorized Person" means employees or agents
including investment managers as have been designated by written notice from
Customer or Company or their respective designated agents to act on behalf of
Customer or Company on behalf of the Fund. Such persons shall continue to be
Authorized Persons until such time as Bank receives Instructions from Customer
or Company or their respective designated agent that any such employee or agent
is no longer an Authorized Person.
11. INSTRUCTIONS.
The term "Instructions" means instructions of any Authorized Person
received by Bank, via telephone, telex, facsimile transmission, bank wire or
other teleprocess or electronic instruction or trade information system
acceptable to Bank which Bank believes in good faith to have been given by
Authorized Persons or which are transmitted with proper testing or
authentication pursuant to terms and conditions which Bank may specify. Unless
otherwise expressly provided, all Instructions shall continue in full force and
effect until canceled or superseded. The term "Instructions" includes, without
limitation, instructions to sell, assign, transfer, deliver, purchase or receive
for the Custody Account, any and all stocks, bonds and other Financial Assets or
to transfer funds in the Cash Account.)
Any Instructions delivered to Bank by telephone shall promptly
thereafter be confirmed in writing by an Authorized Person (which confirmation
may bear the facsimile signature of such Person), but Customer and Company shall
hold Bank harmless for the failure of an Authorized Person to send such
confirmation in writing, the failure of such confirmation to conform to the
telephone instructions received or Bank's failure to produce such confirmation
at any subsequent time. Bank may electronically record any Instructions given by
telephone, and any other telephone discussions with respect to the Custody
Account. Customer shall be responsible for safeguarding any testkeys,
identification codes or other security devices which Bank shall make available
to Customer or its Authorized Persons.
12. STANDARD OF CARE; LIABILITIES.
(a) Bank shall be responsible for the performance of only such duties
as are set forth herein or expressly contained in Instructions which are
consistent with the provisions hereof as follows:
(i) Bank shall use reasonable care with respect to its
obligations hereunder and the safekeeping of Assets. The Bank shall be
liable to the Customer for any loss which shall occur as the result of
the failure of a Subcustodian to exercise reasonable care with respect
to the safekeeping of such Assets to the same extent that the Bank
would be liable to the Customer if the Bank were holding such Assets in
New York. In the event of any loss to Customer by reason of the failure
of Bank or its Subcustodian to utilize reasonable care, Bank shall be
liable to Customer only to the extent of Customer's direct damages, to
be determined based on the market value of the property which is the
subject of the loss at the date of discovery of such loss and without
reference to any special con ditions or circumstances. Bank shall have
no liability whatsoever for any consequential, special, indirect or
speculative loss or damages (including, but not limited to, lost
profits) suffered by Customer or Company, as appropriate, in connection
with the transactions contemplated hereby and the relationship
established hereby even if Bank has been advised as to the possibility
of the same and regardless of the form of the action.
(ii) Subject to Bank having selected a Subcustodian with
reasonable care and Bank's duty to use reasonable care in the
monitoring of a Subcustodian's financial condition as reflected in its
published financial statements and other publicly available financial
information, Bank shall not be responsible for the insolvency of any
Subcustodian which is not a branch or Affiliate of Bank. Bank shall not
be responsible for any act, omission,
default or the solvency of any broker or agent which it or a
Subcustodian appoints unless such appointment was made negligently or
in bad faith.
(iii) Bank shall be indemnified by, and without liability to
Customer or Company for any action taken or omitted by Bank whether
pursuant to Instructions or otherwise within the scope hereof if such
act or omission was in good faith, without negligence. In performing
its obligations hereunder, Bank may rely on the genuineness of any
document which it believes in good faith to have been validly executed.
(iv) Company shall pay for and hold Bank harmless from any
liability or loss resulting from the imposition or assessment of any
taxes or other governmental charges, and any related expenses with
respect to income from or Assets in the Accounts.
(v) Bank shall be entitled to rely, and may act, upon the
advice of counsel (who may be counsel for Customer and/or Company) on
all matters and shall be without liability for any action reasonably
taken or omitted pursuant to such advice.
(vi) Bank need not maintain any insurance for the benefit of
Customer and Company.
(vii) Without limiting the foregoing, Bank shall not be liable
for any loss which results from: 1) the general risk of investing, or
2) investing or holding Assets in a particular country including, but
not limited to, losses resulting from malfunction, interruption of or
error in the transmission of information caused by any machines or
system or interruption of communication facilities, abnormal operating
conditions, nationalization, expropriation or other governmental
actions; regulation of the banking or securities industry; currency
restrictions, devaluations or fluctuations; and market conditions which
prevent the orderly execution of securities transactions or affect the
value of Assets; except that, with respect to the failure of machines,
systems, interruption of communication facilities or abnormal operating
conditions on Bank or a Subcustodian's premises or otherwise within the
control of Bank or a Subcustodian, Bank shall not be so excused to the
extent that such failure was on account of Bank's or the Subcustodian's
(as the case may be) negligence.
(viii) No party shall be liable to the others for any loss due
to forces beyond its control including, but not limited to strikes or
work stoppages, acts of war (whether declared or undeclared) or
terrorism, insurrection, revolution, nuclear fusion, fission or
radiation, or acts of God.
(b) Consistent with and without limiting the first paragraph of this
Section 12, it is specifically acknowledged that Bank shall have no duty or
responsibility to:
(i) question Instructions or make any suggestions to Customer
or an Authorized Person regarding such Instructions;
(ii) supervise or make recommendations with respect to
investments or the retention of Financial Assets;
(iii) evaluate or report to Customer or an Authorized Person
regarding the financial condition of any broker, agent or other party
to which Financial Assets are delivered or payments are made pursuant
hereto, except for brokers appointed to dispose of fractional shares;
and
(iv) review or reconcile trade confirmations received from
brokers. Customer, Company or its Authorized Persons issuing
Instructions shall bear any responsibility to review such confirmations
against Instructions issued to and statements issued by Bank.
(c) Customer and Company authorize Bank to act hereunder
notwithstanding that Bank or any of its divisions or Affiliates may have a
material interest in a transaction, or circumstances are such that Bank may have
a potential conflict of duty or interest including the fact that Bank or any of
its Affiliates may provide brokerage services to other customers, act as
financial advisor to the issuer of Financial Assets, act as a lender to the
issuer of Financial Assets, act in the same transaction as agent for more than
one customer, have a material interest in the issue of Financial Assets, or earn
profits from any of the activities listed herein.
13. FEES AND EXPENSES.
Customer on behalf of Fund shall pay Bank for its services hereunder
the fees set forth in Schedule B hereto or such other amounts as may be agreed
upon in writing, together with Bank's reasonable out-of-pocket or incidental
expenses, including, but not limited to, legal fees. Bank shall have a lien on
and is authorized to charge any Accounts of Customer opened on behalf of Fund
for any amount owing by Customer on behalf of Fund to Bank under any provision
hereof.
14. MISCELLANEOUS.
(a) Foreign Exchange Transactions. To facilitate the administration of
Customer's trading and investment activity on behalf of Fund, Bank is authorized
to enter into spot or forward foreign exchange contracts with Company or an
Authorized Person for Company and may also provide foreign exchange through its
subsidiaries, Affiliates or Subcustodians. Instructions, including standing
instructions, may be issued with respect to such contracts but Bank may
establish rules or limitations concerning any foreign exchange facility made
available. In all cases where Bank, its subsidiaries, Affiliates or
Subcustodians enter into a foreign exchange contract related to Accounts, the
terms and conditions of the then current foreign exchange contract of Bank, its
subsidiary, Affiliate or Subcustodian and, to the extent not inconsistent, this
Agreement shall apply to such transaction.
(b) Certification of Residency, etc. Customer and Company each
certifies that it is a resident of the United States and shall notify Bank of
any changes in residency. Bank may rely upon this certification or the
certification of such other facts as may be required to administer Bank's
obligations hereunder. Customer or Company, as appropriate, shall indemnify Bank
against all losses, liability, claims or demands arising directly or indirectly
from any such certifications.
(c) Access to Records. Bank shall allow Customer's and Fund's
independent public accountant reasonable access to the records of Bank relating
to the Assets as is required in connection with their examination of books and
records pertaining to Customer's and Company's affairs. Subject to restrictions
under applicable law, Bank shall also obtain an undertaking to permit Customer's
and Company's independent public accountants reasonable access to the records of
any Subcustodian which has physical possession of any Assets as may be required
in connection with the examination of Customer's and Company's books and
records.
(d) Governing Law; Successors and Assigns, Captions THIS AGREEMENT
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED IN NEW YORK and shall not be assignable by any party,
but shall bind the successors in interest of Customer, Company and Bank. The
captions given to the sections and subsections of this Agreement are for
convenience of reference only and are not to be used to interpret this
Agreement.
(e) Entire Agreement; Applicable Riders. Customer and Company each
represent that the Assets deposited in the Accounts are (Check one):
_X_ Investment Company assets subject to certain U.S. Securities and
Exchange Commission rules and regulations;
___ Other (specify)
This Agreement consists exclusively of this document together with
Schedules A and B, Exhibits I - _______ and the following Rider(s)
[Check applicable rider(s)]:
_X_ INVESTMENT COMPANY
___ PROXY VOTING
___ SPECIAL TERMS AND CONDITIONS
There are no other provisions hereof and this Agreement supersedes any
other agreements, whether written or oral, between the parties. Any amendment
hereto must be in writing, executed by both parties.
(f) Severability. In the event that one or more provisions hereof are
held invalid, illegal or unenforceable in any respect on the basis of any
particular circumstances or in any jurisdiction, the validity, legality and
enforceability of such provision or provisions under other circumstances or in
other jurisdictions and of the remaining provisions shall not in any way be
affected or impaired.
(g) Waiver. Except as otherwise provided herein, no failure or delay on
the part of either party in exercising any power or right hereunder operates as
a waiver, nor does any single or partial exercise of any power or right preclude
any other or further exercise, or the exercise of any other power or right. No
waiver by a party of any provision hereof, or waiver of any breach or default,
is effective unless in writing and signed by the party against whom the waiver
is to be enforced.
(h) Representations and Warranties. (i) Customer hereby represents and
warrants to Bank that: (A) it has full authority and power to deposit and
control the Financial Assets and cash deposited in the Accounts; (B) it has all
necessary authority to use Bank as its custodian; (C) this Agreement constitutes
its legal, valid and binding obligation, enforceable in accordance with its
terms; (D) it shall have full authority and power to borrow moneys and enter
into foreign exchange transactions; and (E) it has not relied on any oral or
written representation made by Bank or any person on its behalf, and
acknowledges that this Agreement sets out to the fullest extent the duties of
Bank. (ii) Bank hereby represents and warrants to Customer and Company that: (A)
it has the full power and authority to perform its obligations hereunder, (B)
this Agreement constitutes its legal, valid and binding obligation; enforceable
in accordance with its terms; and (C) that it has taken all necessary action to
authorize the execution and delivery hereof. (iii) Company hereby represents and
warrants to Bank that: (A) it has the full power and authority to perform its
obligations hereunder, (B) this Agreement constitutes its legal, valid and
binding obligation; enforceable in accordance with its terms; and (C) that it
has taken all necessary action to authorize the execution and delivery hereof.
(i) Notices. All notices hereunder shall be effective when actually
received. Any notices or other communications which may be required hereunder
are to be sent to the parties at the following addresses or such other addresses
as may subsequently be given to the other party in writing: (a) Bank: The Chase
Manhattan Bank, 4 Chase MetroTech Center, Brooklyn, N.Y. 11245, Attention:
Global Investor Services, Investment Management Group; and (b) Customer: Firstar
Trust Company, 000 Xxxx Xxxxxxxx Xx., Xxxxxxxxx, XX 00000, att: Xxxx Xxxxxx; (c)
Fund: Investment Advisers, Inc, X.X. Xxx 000, Xxxxxxxxxxx, XX 00000 attn:
Director of Administration.
(j) Termination. This Agreement may be terminated by Customer, Company
or Bank by giving sixty (60) days written notice to the other, provided that
such notice to Bank shall specify the names of the persons to whom Bank shall
deliver the Assets in the Accounts. If notice of termination is given by Bank,
Customer, on behalf of Fund, shall, within sixty (60) days following receipt of
the notice, deliver to Bank Instructions specifying the names of the persons to
whom Bank shall deliver the Assets. In either case Bank shall deliver the Assets
to the persons so specified, after deducting any amounts which Bank determines
in good faith to be owed to it under Section 13. If within sixty (60) days
following receipt of a notice of termination by Bank, Bank does not receive
Instructions from Customer specifying the names of the persons to whom Bank
shall deliver the Assets, Bank, at its election, may deliver the Assets to a
bank or trust company doing business in the State of New York to be held and
disposed of pursuant to the provisions hereof, or to Authorized Persons, or may
continue to hold the Assets until Instructions are provided to Bank.
(k) Money Laundering. Customer warrants and undertakes to Bank for
itself and its agents that all Customer's customers are properly identified in
accordance with U.S. Money Laundering Regulations as in effect from time to
time.
(l) Imputation of certain information. Bank shall not be held
responsible for and shall not be required to have regard to information held by
any person by imputation or information of which Bank is not aware by virtue of
a "Chinese Wall" arrangement. If Bank becomes aware of confidential information
which in good faith it feels inhibits it from effecting a transaction hereunder
Bank may refrain from effecting it.
(m) Separate Portfolio. The parties acknowledge that the Fund is a
separate investment portfolio of the Company. All obligations of the Company
hereunder are limited to the Fund and any amount owed by the Company hereunder
shall be paid only out of the assets and property of the Fund.
(n) Business Trust. A copy of the Certificate of Trust of the Company
is on file with the Secretary of the State of Delaware and notice is hereby
given that this Agreement is not binding upon any o ht trustees, officers or
shareholders of the Company individually, but are binding only upon the assets
and property of Fund. Bank agrees that no shareholder,
trustee or officer of Company or Fund may be held personally liable or
responsible for any obligation of Fund arising hereunder.
(o) Chase has developed and is implementing a program to prepare
Chase's systems and applications so that they will be capable of processing, on
and after January 1, 2000, date and date related data consistent with the
functionality of such systems and applications. In addition, Chase is or will be
conducting testing with its Subcustodians concerning the readiness of their
respective systems and applications. In connection with this paragraph, Chase's
obligations to Customer, as respects both Chase's performance and Chase's
liability (and the limitations thereon), shall continue as and to the extent
provided elsewhere in this Agreement.
15. DEFINITIONS.
As used herein, the following terms shall have the meaning hereinafter
stated:
a) "Certificated Security" shall mean a security that is represented by a
certificate.
b) "Custody Account" means each Securities custody account on Bank's
records to which Financial Assets are or may be credited pursuant
hereto.
c) "Entitlement Holder" shall mean the person on the records of a
Securities Intermediary as the person having a Securities Entitlement
against the Securities Intermediary.
d) "Financial Asset" shall mean, as the context requires, either the asset
itself or the means by which a person's claim to it is evidenced,
including a Certificated Security or Uncertificated Security, a
security certificate, or a Securities Entitlement.
e) "Securities" means stocks, bonds, rights, warrants and other negotiable
and non-negotiable paper whether issued as Certificated Securities or
Uncertificated Securities and commonly traded or dealt in on securities
exchanges or financial markets, and other obligations of an issuer, or
shares, participations and interests in an issuer recognized in an area
in which it is issued or dealt in as a medium for investment and any
other property as shall be acceptable to Bank for the Custody Account.
f) "Securities Entitlement" shall mean the rights and property interest of
an Entitlement Holder with respect to a Financial Asset as set forth in
Part 5 of the Uniform Commercial Code.
g) "Securities Intermediary" shall mean Bank, a Subcustodian, a securities
depository, and any other financial institution which in the ordinary
course of business maintains custody accounts for others and acts in
that capacity.
h) "Uncertificated Security" shall mean a security that is not represented
by a certificate.
i) "Uniform Commercial Code" means Article 8 of the Uniform Commercial
Code of the State of New York, as the same may be amended from time to
time.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first-above written.
IAI INVESTMENT FUNDS VI, INC. IAI INVESTMENT FUNDS III, INC.
On behalf of IAI Balanced Fund On behalf of IAI International Fund
By: /s/ Xxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxxxx
-------------------------------- -----------------------------------
Title: Treasurer Title: Treasurer
Date: April 22, 1999 Date: April 22, 1999
FIRSTAR TRUST COMPANY
By:
-----------------------------------
Title:
Date:
THE CHASE MANHATTAN BANK
By:
-----------------------------------
Title:
Date:
STATE OF MINNESOTA)
: ss.
COUNTY OF HENNEPIN)
On this 22nd day of April, 1999 , before me personally came Xxxx X.
Xxxxxxx, to me known, who being by me duly sworn, did depose and say that he/she
resides in at that he is
Treasurer of the IAI Balanced Fund, entity described in and which executed the
foregoing instrument.
Sworn to before me this 22nd
day of April 1999
Notary: Xxxxxxx Xxxxxxx
1
STATE OF MINNESOTA)
: ss.
COUNTY OF HENNEPIN)
On this 22nd day of April, 1999 , before me personally came Xxxx X.
Xxxxxxx, to me known, who being by me duly sworn, did depose and say that he/she
resides in at that he is
Treasurer of the IAI International Fund, entity described in and which executed
the foregoing instrument.
Sworn to before me this 22nd
day of April 1999
Notary: Xxxxxxx Xxxxxxx
0
XXXXX XX XXX XXXX)
: ss.
COUNTY OF NEW YORK)
On this day of , 199 , me personally came ,
to me known, who being by me duly sworn, did depose and say that he/she resides
in at ; that he/she is a Vice President of THE
CHASE MANHATTAN BANK, the corporation described in and which executed the
foregoing instrument; that he/she knows the seal of said corporation, that the
seal affixed to said instrument is such corporate seal, that it was so affixed
by order of the Board of Directors of said corporation, and that he/she signed
his/her name thereto by like order.
------------------------------
Sworn to before me this
-----------------
day of_________________, 199_.
------------------------------
Notary
3
Investment Company Rider to Global Custody Agreement
among THE CHASE MANHATTAN BANK,
FIRSTAR TRUST COMPANY, and IAI Balanced Fund
effective April 22, 1999
The following modifications are made to the Agreement:
A. Add a new Section 16 to the Agreement as follows:
"16. COMPLIANCE WITH SEC RULE 17f-5.
(a) Company's board of directors (or equivalent body) (hereinafter
'Board') hereby delegates to Bank, and, except as to the country or countries as
to which Bank may, from time to time, advise Company that it does not accept
such delegation, Bank hereby accepts the delegation to it, of the obligation to
perform as Company's 'Foreign Custody Manager' (as that term is defined in SEC
rule 17f-5(a)(2)), both for the purpose of selecting Eligible Foreign Custodians
(as that term is defined in SEC rule 17f-5(a)(1), and as the same may be amended
from time to time, or that have otherwise been made exempt pursuant to an SEC
exemptive order) to hold Assets and of evaluating the contractual arrangements
with such Eligible Foreign Custodians (as set forth in SEC rule 17f-5(c)(2));
provided that, the term Eligible Foreign Custodian shall not include any
'Compulsory Depository.' A Compulsory Depository shall mean a securities
depository or clearing agency the use of which is compulsory because: (1) its
use is required by law or regulation, (2) securities cannot be withdrawn from
the depository, or (3) maintaining securities outside the depository is not
consistent with prevailing custodial practices in the country which the
depository serves. Compulsory Depositories used by Chase as of the date hereof
are set forth in Appendix 1-A hereto, and as the same may be amended on notice
to Company from time to time.
(b) In connection with the foregoing, Bank shall:
(i) provide written reports notifying Company's Board of the placement
of Assets with particular Eligible Foreign Custodians and of any
material change in the arrangements with such Eligible Foreign
Custodians, with such reports to be provided to Company's Board at such
times as the Board deems reasonable and appropriate based on the
circumstances of Company's foreign custody arrangements (and until
further notice from Company such reports shall be provided not less
than quarterly with respect to the placement of Assets with particular
Eligible Foreign Custodians and with reasonable promptness upon the
occurrence of any material change in the arrangements with such
Eligible Foreign Custodians);
(ii) exercise such reasonable care, prudence and diligence in
performing as Company's Foreign Custody Manager as a person having
responsibility for the safekeeping of Assets would exercise;
(iii) in selecting an Eligible Foreign Custodian, first have determined
that Assets placed and maintained in the safekeeping of such Eligible
Foreign Custodian shall be subject to reasonable care, based on the
standards applicable to custodians in the relevant market, after having
considered all factors relevant to the safekeeping of such Assets,
including, without limitation, those factors set forth in SEC rule
17f-5(c)(1)(i)-(iv);
(iv) determine that the written contract with the Eligible Foreign
Custodian (or, in the case of an Eligible Foreign Custodians that is a
securities depository or clearing agency, such contract, the rules or
established practices or procedures of the depository, or any
combination of the foregoing) requires that the Eligible Foreign
Custodian will provide reasonable care for Assets based on the
standards applicable to custodians in the relevant market. In making
this determination, Bank shall consider the provisions of Rule
17f-5(c)(2), together with whether Bank shall be liable to Company for
any loss which shall occur as the result of the failure of the Eligible
Foreign Custodian to exercise reasonable care with respect to the
safekeeping of such Assets to the same extent that Bank would be liable
to Company if Bank were holding such Assets in New York; and
1
(v) have established a system to monitor the continued appropriateness
of maintaining Assets with particular Eligible Foreign Custodians and
of the governing contractual arrangements; it being understood,
however, that in the event that Bank shall have determined that the
existing Eligible Foreign Custodian in a given country would no longer
afford Assets reasonable care and that no other Eligible Foreign
Custodian in that country would afford reasonable care, Bank shall
promptly so advise Company and shall then act in accordance with the
Instructions of Company with respect to the disposition of the affected
Assets.
Subject to (b)(i)-(v) above, Bank is hereby authorized to place and maintain
Assets on behalf of Company with Eligible Foreign Custodians pursuant to a
written contract deemed appropriate by Bank.
(c) Except as expressly provided herein, Customer and Company shall be
solely responsible to assure that the maintenance of Assets hereunder complies
with the rules, regulations, interpretations and exemptive orders promulgated by
or under the authority of the SEC.
(d) Bank represents to Company that it is a U.S. Bank as defined in
Rule 17f-5(a)(7). Company represents to Bank that: (1) the Assets being placed
and maintained in Bank's custody are subject to the Investment Company Act of
1940, as amended (the '1940 Act'), as the same may be amended from time to time;
(2) its Board: (i) has determined that it is reasonable to rely on Bank to
perform as Company's Foreign Custody Manager (ii) or its Foreign Custody Manager
(other than Bank) shall have determined that Company may maintain Assets in each
country in which Company's Assets shall be held hereunder and determined to
accept the risks arising therefrom (including, but not limited to, a country's
financial infrastructure (and including any Compulsory Depository operating in
such country), prevailing custody and settlement practices, laws applicable to
the safekeeping and recovery of Assets held in custody, and the likelihood of
nationalization, currency controls and the like)."
B. Add the following after the first sentence of Section 3 of the
Agreement: "At the request of Customer, Bank may, but need not, add to Schedule
A an Eligible Foreign Custodian that is either a bank or a non-Compulsory
Depository where Bank has not acted as Foreign Custody Manager with respect to
the selection thereof. Bank shall notify Customer in the event that it elects
not to add any such entity."
C. Add the following language to the end of Section 3 of the Agreement:
"The term Subcustodian as used herein shall mean the following:
(a) a 'U.S. Bank,' which shall mean a U.S. bank as defined in SEC rule
17f-5(a)(7);
(b) an 'Eligible Foreign Custodian,' which shall mean (i) a banking
institution or trust company, incorporated or organized under the laws
of a country other than the United States, that is regulated as such by
that country's government or an agency thereof, (ii) a majority-owned
direct or indirect subsidiary of a U.S. bank or bank holding company
which subsidiary is incorporated or organized under the laws of a
country other than the United States; (iii) a securities depository or
clearing agency, incorporated or organized under the laws of a country
other than the United States, that acts as a system for the central
handling of securities or equivalent book-entries in that country and
that is regulated by a foreign financial regulatory authority as
defined under section 2(a)(50) of the 1940 Act, (iv) a securities
depository or clearing agency organized under the laws of a country
other than the United States to the extent acting as a transnational
system for the central handling of securities or equivalent
book-entries, and (v) any other entity that shall have been so
qualified by exemptive order, rule or other appropriate action of the
SEC.
For purposes of clarity, it is agreed that as used in Section 12(a)(i), the term
Subcustodian shall include neither any Eligible Foreign Custodian as to which
Bank has not acted as Foreign Custody Manager nor any Compulsory Depository."
2
Appendix 1-A
COMPULSORY DEPOSITORIES
--------------------------------------------------------------------------------------------------------------------
ARGENTINA Caja de Valores S.A. Equity, Corporate & Government
Debt
COMPULSORY
--------------------------------------------------------------------------------------------------------------------
AUSTRALIA AUSTRACLEAR LTD. Corporate Debt, Money Market &
Semi-Government Debt
COMPULSORY
--------------------------------------------------------------------------------------------------------------------
AUSTRALIA CHESS Equity
(Clearing House Electronic Subregister System) COMPULSORY
--------------------------------------------------------------------------------------------------------------------
AUSTRALIA RITS Government Debt
(Reserve Bank Information and Transfer System) COMPULSORY
--------------------------------------------------------------------------------------------------------------------
AUSTRIA Osterreichische Kontrolbank AG Equity, Corporate + Government
Debt
COMPULSORY
--------------------------------------------------------------------------------------------------------------------
BELGIUM CIK Equity + Corporate Debt
(Caisse Interprofessionnelle de Depots et de COMPULSORY
Virements de Titres s.a.)
--------------------------------------------------------------------------------------------------------------------
BELGIUM BANQUE NATIONALE DE BELGIQUE Treasury Bills + Government Debt
COMPULSORY
--------------------------------------------------------------------------------------------------------------------
BRAZIL CBLC Equity
(Companhia Brasileira de Liquidacao e Custodia) COMPULSORY
--------------------------------------------------------------------------------------------------------------------
BRAZIL CLC Equity
(Camara de Liquidacao e Custodia COMPULSORY
--------------------------------------------------------------------------------------------------------------------
BRAZIL CETIP Corporate Debt
COMPULSORY
--------------------------------------------------------------------------------------------------------------------
BULGARIA BNB Government Debt
(Bulgaria National Bank) COMPULSORY
--------------------------------------------------------------------------------------------------------------------
BULGARIA CENTRAL DEPOSITORY A.D. Equity
COMPULSORY
--------------------------------------------------------------------------------------------------------------------
CANADA CDS Equity, Corporate + Government
(The Canadian Depository for Securities Debt
Ltd.) COMPULSORY
--------------------------------------------------------------------------------------------------------------------
CHILE DCV Equity, Corporate + Government
--------------------------------------------------------------------------------------------------------------------
1
-------------------------------------------------------------------------------------------------------------------
(Deposito Central de Valores Debt
COMPULSORY for government debt securities
and for brokers as of November 1998; will
be compulsory for all market participants
during 1999.
--------------------------------------------------------------------------------------------------------------------
CHINA, SSCCRC Equity
SHANGHAI (Shanghai Securities Central Clearing and COMPULSORY
Registration Corporation)
--------------------------------------------------------------------------------------------------------------------
CHINA, SSCC Equity
SHENZHEN (Shenzhen Securities Clearing Company, Limited) COMPULSORY
--------------------------------------------------------------------------------------------------------------------
COLOMBIA DCV Government debt issued, guaranteed
(Deposito Central de Valores) or administered by the central bank.
COMPULSORY
--------------------------------------------------------------------------------------------------------------------
COLOMBIA DECEVAL Equity, Corporate + Government
(Deposito Central de Valores) Debt
VOLUNTARY. Due to change in tax status of
DECEVAL, use of DECEVAL is becoming
market standard.
--------------------------------------------------------------------------------------------------------------------
CROATIA CDA Equity and listed government debt.
(Central Depository Agency) (Created in April 1997, the CDA is
expected to be operational in 1999)
COMPULSORY
--------------------------------------------------------------------------------------------------------------------
CROATIA MINISTRY OF FINANCE REGISTRY Short-term debt issued by the Ministry
& of Finance and the National Bank of
NATIONAL BANK OF CROATIA REGISTRY Croatia, respectively.
COMPULSORY
--------------------------------------------------------------------------------------------------------------------
CZECH SCP Equity + Long-Term Government Debt
REPUBLIC (Stredisko cennych papiru) COMPULSORY
--------------------------------------------------------------------------------------------------------------------
DENMARK VP Equity, Corporate + Government
(Vaerdipapircentralen) Debt
COMPULSORY
--------------------------------------------------------------------------------------------------------------------
EGYPT MISR CLEARING, SETTLEMENT AND Equity
DEPOSITORY, S.A.E. COMPULSORY
--------------------------------------------------------------------------------------------------------------------
ESTONIA EVK Equity
(Estonian Central Depository for Securities COMPULSORY
Limited)
--------------------------------------------------------------------------------------------------------------------
EUROMARKET CEDEL & EUROCLEAR Euro-Debt
COMPULSORY
--------------------------------------------------------------------------------------------------------------------
2
-------------------------------------------------------------------------------------------------------------------
FINLAND CSR Equity + Government Debt
(Central Share Registry Finland) COMPULSORY
--------------------------------------------------------------------------------------------------------------------
FRANCE SICOVAM Equity + Corporate Debt
(Societe Interprofessionnelle pour la COMPULSORY
Compensation des Valeurs Mobilieres, S.A.)
--------------------------------------------------------------------------------------------------------------------
GERMANY DBC Equity, Corporate + Government
(Deutsche Boerse Clearing AG) Debt
COMPULSORY
--------------------------------------------------------------------------------------------------------------------
GREECE APOTHETIRIO TITLON A.E. Equity
COMPULSORY
--------------------------------------------------------------------------------------------------------------------
GREECE BANK OF GREECE Government Debt
COMPULSORY
--------------------------------------------------------------------------------------------------------------------
HONG KONG CCASS Equity
(Central Clearing and Settlement System) COMPULSORY
--------------------------------------------------------------------------------------------------------------------
HONG CMU Corporate + Government Debt
KONG (Central Moneymarkets Unit) COMPULSORY
--------------------------------------------------------------------------------------------------------------------
HUNGARY KELER LTD. Equity + Government Debt
COMPULSORY
--------------------------------------------------------------------------------------------------------------------
INDIA NSDL Equity + Corporate Debt
(National Securities Depository Limited) COMPULSORY
--------------------------------------------------------------------------------------------------------------------
IRELAND CRESTCO LIMITED Equity
COMPULSORY
--------------------------------------------------------------------------------------------------------------------
IRELAND GSO Government Debt
(Gilt Settlement Office) COMPULSORY
--------------------------------------------------------------------------------------------------------------------
ISRAEL TASE CLEARING HOUSE Equity, Corporate + Government
(Tel Aviv Stock Exchange Clearing Debt
House) COMPULSORY
--------------------------------------------------------------------------------------------------------------------
ITALY MONTE TITOLI S.P.A. Equity + Corporate Debt
COMPULSORY
--------------------------------------------------------------------------------------------------------------------
ITALY BANK OF ITALY Government Debt
COMPULSORY
--------------------------------------------------------------------------------------------------------------------
JAPAN JASDEC Equity
--------------------------------------------------------------------------------------------------------------------
3
-------------------------------------------------------------------------------------------------------------------
(Japan Securities Depository Center) VOLUNTARY
-------------------------------------------------------------------------------------------------------------------
JAPAN BANK OF JAPAN Registered Government Debt
COMPULSORY
-------------------------------------------------------------------------------------------------------------------
KAZAHKSTA CENTRAL SECURITIES DEPOSITORY Mandatory for all equity securities
N traded on the Kazahkstan Stock
Exchange. Currently all trading is over
the counter.
VOLUNTARY
-------------------------------------------------------------------------------------------------------------------
LATVIA LCD Equity + Government Debt
(Latvian Central Depository) COMPULSORY
-------------------------------------------------------------------------------------------------------------------
LEBANON MIDCLEAR Equity
(Custodian and Clearing Center of COMPULSORY
Lebanon and the Middle East)
-------------------------------------------------------------------------------------------------------------------
LITHUANIA CSDL Equity + Government Debt
(Central Securities Depository of COMPULSORY
Lithuania)
-------------------------------------------------------------------------------------------------------------------
LUXEMBOU CEDEL BANK, s.a. Equity
RG COMPULSORY
-------------------------------------------------------------------------------------------------------------------
MALAYSIA MCD Equity
(Malaysian Central Depository Snd Bhd) COMPULSORY
-------------------------------------------------------------------------------------------------------------------
MAURITIUS CDS Equity
(Central Depository and Settlement COMPULSORY
Company Limited)
-------------------------------------------------------------------------------------------------------------------
MEXICO INDEVAL Equity, Corporate + Government
(Institucion para el Deposito de Debt.
Valores) COMPULSORY
-------------------------------------------------------------------------------------------------------------------
MOROCCO MAROCLEAR Equity + Corporate Debt (will be
compulsory as of March 21, 1999)
COMPULSORY
-------------------------------------------------------------------------------------------------------------------
NETHERLAN NECIGEF Equity, Corp. + Govt. D
DS (Nederlands Centraal Insituut voor Giraal COMPULSORY
Effectenverkeer B.V.)
-------------------------------------------------------------------------------------------------------------------
NEW AUSTRACLEAR NEW ZEALAND Equity, Corporate + Government
ZEALAND Debt
COMPULSORY
-------------------------------------------------------------------------------------------------------------------
NORWAY VPS Equity, Corporate + Government
-------------------------------------------------------------------------------------------------------------------
4
-------------------------------------------------------------------------------------------------------------------
Debt
COMPULSORY
-------------------------------------------------------------------------------------------------------------------
OMAN MSM Equity
(Muscat Securities Market) COMPULSORY
-------------------------------------------------------------------------------------------------------------------
PAKISTAN CDC Equity
(Central Depository Company of COMPULSORY
Pakistan Limited)
-------------------------------------------------------------------------------------------------------------------
PERU CAVALI Equity
(Caja de Valores y Liquidaciones) COMPULSORY
-------------------------------------------------------------------------------------------------------------------
PHILIPPINES PCD Equity
(Philippine Central Depository Inc.) COMPULSORY
-------------------------------------------------------------------------------------------------------------------
POLAND NDS Equity, Long-Term Government Debt
(National Securities Depository) + Vouchers
COMPULSORY
-------------------------------------------------------------------------------------------------------------------
POLAND CRT Treasury-Bills
(Central Registry of Treasury-Bills) COMPULSORY
-------------------------------------------------------------------------------------------------------------------
PORTUGAL INTERBOLSA Equity, Corporate + Government
(Central de Valores Mobiliariose Debt
Sistema de Liquidacao e Compensacao) COMPULSORY
-------------------------------------------------------------------------------------------------------------------
ROMANIA SNCDD - RASDAQ Equity
(National Company for Clearing, COMPULSORY
Settlement and Depository for Securities)
-------------------------------------------------------------------------------------------------------------------
ROMANIA BSE Equity
(Bucharest Stock Exchange Registry) COMPULSORY
-------------------------------------------------------------------------------------------------------------------
ROMANIA NATIONAL BANK OF ROMANIA Treasury-Bills
COMPULSORY
-------------------------------------------------------------------------------------------------------------------
RUSSIA VNESTORGBANK Ministry of Finance Bonds
COMPULSORY
-------------------------------------------------------------------------------------------------------------------
RUSSIA NATIONAL DEPOSITORY CENTER GKOs are Treasury Bills with three
months to one year maturity; OFZs
are Federal Loan bonds with one to
two years' maturity.
COMPULSORY
-------------------------------------------------------------------------------------------------------------------
SINGAPORE CDP Equity + Corporate Debt and
-------------------------------------------------------------------------------------------------------------------
5
-------------------------------------------------------------------------------------------------------------------
Malaysian equities traded on CLOB
COMPULSORY
-------------------------------------------------------------------------------------------------------------------
SINGAPORE MONETARY AUTHORITY OF SINGAPORE Government Debt
COMPULSORY
-------------------------------------------------------------------------------------------------------------------
SLOVAK SCP Equity + Government Debt
REPUBLIC (Stredisko Cennych Papierov) COMPULSORY
-------------------------------------------------------------------------------------------------------------------
SLOVAK NATIONAL BANK OF SLOVAKIA Treasury-Bills
REPUBLIC COMPULSORY
-------------------------------------------------------------------------------------------------------------------
SLOVENIA KDD Equity + Corporate Debt
(The Centralna Klirinsko COMPULSORY
Depotna Xxxxxx x.x.
-------------------------------------------------------------------------------------------------------------------
SOUTH CD Corporate + Government Debt
AFRICA (Central Depository (Pty) Limited) COMPULSORY
-------------------------------------------------------------------------------------------------------------------
SOUTH KSD Equity, Corporate + Government
KOREA Debt
COMPULSORY
-------------------------------------------------------------------------------------------------------------------
SPAIN SCLV Equity + Corporate Debt.
(Servicio de Compensacion y COMPULSORY
Liquidacion de Valores, S.A.)
-------------------------------------------------------------------------------------------------------------------
SPAIN CBEO Government Debt
(Central Book Entry Office) COMPULSORY
-------------------------------------------------------------------------------------------------------------------
SRI LANKA CDS Equity
(Central Depository System (Pte) COMPULSORY
Limited)
-------------------------------------------------------------------------------------------------------------------
SWEDEN VPC Equity, Corporate + Government
(Vardepapperscentralen AB) Debt
COMPULSORY
-------------------------------------------------------------------------------------------------------------------
SWITZERLAND SEGA Equity, Corporate + Government
(Schweizerische Effekten-Giro AG) Debt
COMPULSORY
-------------------------------------------------------------------------------------------------------------------
TAIWAN TSCD Equity + Government Debt
(Taiwan Securities Central Depository COMPULSORY
Co., Ltd.)
-------------------------------------------------------------------------------------------------------------------
THAILAND TSDC Equity, Corporate + Government
(Thailand Securities Depository Company Debt
Limited) COMPULSORY
-------------------------------------------------------------------------------------------------------------------
6
-------------------------------------------------------------------------------------------------------------------
TUNISIA STICODEVAM Equity
(Societe Tunisienne Interprofessionnelle COMPULSORY
pour la Compensation et le Depot des Valeurs
Mobilieres)
-------------------------------------------------------------------------------------------------------------------
TUNISIA MINISTRY OF FINANCE Government Debt tradable on the
stock exchange (BTNBs)
COMPULSORY
-------------------------------------------------------------------------------------------------------------------
TUNISIA CENTRAL BANK OF TUNISIA Government Debt not tradable on
the stock exchange (BTCs)
COMPULSORY
-------------------------------------------------------------------------------------------------------------------
TURKEY IMKB TAKAS VE SAKLAMA BANKASI Equity + Corporate Debt
A.S. COMPULSORY
-------------------------------------------------------------------------------------------------------------------
TURKEY CENTRAL BANK OF TURKEY Government Debt
COMPULSORY
-------------------------------------------------------------------------------------------------------------------
UNITED CRESTCO LIMITED Equity + Corp. Debt
KINGDOM COMPULSORY
-------------------------------------------------------------------------------------------------------------------
UNITED CMO Sterling CDs & CP
KINGDOM (Central Moneymarket Office) COMPULSORY
-------------------------------------------------------------------------------------------------------------------
UNITED CGO Gilts
KINGDOM (Central Gilts Office) COMPULSORY
-------------------------------------------------------------------------------------------------------------------
UNITED DTC Equity + Corporate Debt
STATES (Depository Trust Company) COMPULSORY
-------------------------------------------------------------------------------------------------------------------
UNITED PTC Mortgage Back Debt
STATES (Participants Trust Company) COMPULSORY
-------------------------------------------------------------------------------------------------------------------
UNITED FED BOOK-ENTRY SYSTEM Government Debt
STATES COMPULSORY
-------------------------------------------------------------------------------------------------------------------
ZAMBIA XxXX Equity + Government Debt
(XxXX Central Shares Depository COMPULSORY
Limited)
-------------------------------------------------------------------------------------------------------------------
7
GLOBAL PROXY SERVICE RIDER
To Global Custody Agreement
among
THE CHASE MANHATTAN BANK,
FIRSTAR TRUST COMPANY, and
IAI Balanced Fund
effective April 22, 1999.
1. Global Proxy Services ("Proxy Services") shall be provided for the
countries listed in the procedures and guidelines ("Procedures")
furnished to Customer, as the same may be amended by Bank from time to
time on prior notice to Customer. The Procedures are incorporated by
reference herein and form a part of this Rider.
2. Proxy Services shall consist of those elements as set forth in the
Procedures, and shall include (a) notifications ("Notifications") by
Bank to Customer of the dates of pending shareholder meetings,
resolutions to be voted upon and the return dates as may be received by
Bank or provided to Bank by its Subcustodians or third parties, and (b)
voting by Bank of proxies based on Customer Instructions. Original
proxy materials or copies thereof shall not be provided. Notifications
shall generally be in English and, where necessary, shall be summarized
and translated from such non-English materials as have been made
available to Bank or its Subcustodian. In this respect Bank's only
obligation is to provide information from sources it believes to be
reliable and/or to provide materials summarized and/or translated in
good faith. Bank reserves the right to provide Notifications, or parts
thereof, in the language received. Upon reasonable advance request by
Customer, backup information relative to Notifications, such as annual
reports, explanatory material concerning resolutions, management
recommendations or other material relevant to the exercise of proxy
voting rights shall be provided as available, but without translation.
3. While Bank shall attempt to provide accurate and complete
Notifications, whether or not translated, Bank shall not be liable for
any losses or other consequences that may result from reliance by
Customer upon Notifications where Bank prepared the same in good faith.
4. Notwithstanding the fact that Bank may act in a fiduciary capacity with
respect to Customer under other agreements or otherwise under the
Agreement, in performing Proxy Services Bank shall be acting solely as
the agent of Customer, and shall not exercise any discretion with
regard to such Proxy Services.
5. Proxy voting may be precluded or restricted in a variety of
circumstances, including, without limitation, where the relevant
Financial Assets are: (i) on loan; (ii) at registrar for registration
or reregistration; (iii) the subject of a conversion or other corporate
action; (iv) not held in a name subject to the control of Bank or its
Subcustodian or are otherwise held in a manner which precludes voting;
(v) not capable of being voted on account of local market regulations
or practices or restrictions by the issuer; or (vi) held in a margin or
collateral account.
6. Customer acknowledges that in certain countries Bank may be unable to
vote individual proxies but shall only be able to vote proxies on a net
basis (e.g., a net yes or no vote given the voting instructions
received from all customers).
7. Customer shall not make any use of the information provided hereunder,
except in connection with the funds or plans covered hereby, and shall
in no event sell, license, give or otherwise make the information
provided hereunder available, to any third party, and shall not
directly or indirectly compete with Bank or diminish the market for
Proxy Services by provision of such information, in whole or in part,
for compensation or otherwise, to any third party.
8. The names of Authorized Persons for Proxy Services shall be furnished
to Bank in accordance with ss.10 of the Agreement. Proxy Services fees
shall be as set forth in ss.13 of the Agreement or as separately
agreed.
1
SPECIAL TERMS AND CONDITIONS RIDER
GLOBAL CUSTODY AGREEMENT
WITH
------------------------------------
DATE
------------------------------------
1
DOMESTIC ONLY
SPECIAL TERMS AND CONDITIONS RIDER
Domestic Corporate Actions and Proxies
With respect to domestic U.S. and Canadian Financial Assets (the latter if held
in DTC), the following provisions shall apply rather than the provisions of
Section 8 of the Agreement and the Global Proxy Service rider:
Bank shall send to Customer or the Authorized Person for a Custody
Account, such proxies (signed in blank, if issued in the name of Bank's
nominee or the nominee of a central depository) and communications with
respect to Financial Assets in the Custody Account as call for voting
or relate to legal proceedings within a reasonable time after
sufficient copies are received by Bank for forwarding to its customers.
In addition, Bank shall follow coupon payments, redemptions, exchanges
or similar matters with respect to Financial Assets in the Custody
Account and advise Customer or the Authorized Person for such Account
of rights issued, tender offers or any other discretionary rights with
respect to such Financial Assets, in each case, of which Bank has
received notice from the issuer of the Financial Assets, or as to which
notice is published in publications routinely utilized by Bank for this
purpose.
Fees
The fees referenced in Section 13 hereof cover only domestic and euro-dollar
holdings. There shall be no Schedule A hereto, as there are no foreign assets in
the Accounts.
1
DOMESTIC AND GLOBAL
SPECIAL TERMS AND CONDITIONS RIDER
Domestic Corporate Actions and Proxies
With respect to domestic U.S. and Canadian Financial Assets (the latter if held
in DTC), the following provisions shall apply rather than the pertinent
provisions of Section 8 of the Agreement and the Global Proxy Service rider:
Bank shall send to Customer or the Authorized Person for a Custody
Account, such proxies (signed in blank, if issued in the name of Bank's nominee
or the nominee of a central depository) and communications with respect to
Financial Assets in the Custody Account as call for voting or relate to legal
proceedings within a reasonable time after sufficient copies are received by
Bank for forwarding to its customers. In addition, Bank shall follow coupon
payments, redemptions, exchanges or similar matters with respect to Financial
Assets in the Custody Account and advise Customer or the Authorized Person for
such Account of rights issued, tender offers or any other discretionary rights
with respect to such Financial Assets, in each case, of which Bank has received
notice from the issuer of the Financial Assets, or as to which notice is
published in publications routinely utilized by Bank for this purpose.
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FEE SCHEDULE
Global Custody Services
Market Safekeeping Per Transaction
(BPs) (USD)
Xxxxxxxxx 00 000
Xxxxxxxxx 8 35
Austria 10 50
Xxxxxxxxxx 00 000
Xxxxxxx 10 00
Xxxxxxxx 00 000
Xxxxxx 40 100
Canada 6 35
Cedel 3 25
Xxxxx 00 000
Xxxxx (Xxxxxxxx & Xxxxxxxx) 00 000
Xxxxxxxx 40 000
Xxxxx Xxxx 00 000
Xxxxxx 50 150
Xxxxx Xxxxxxxx 00 000
Xxxxxxx 10 00
Xxxxxxx 00 000
Xxxxxxx 00 00
Xxxxxx 8 35
Germany 8 35
Xxxxx 00 000
Xxxxxx 40 100
Hong Kong 10 00
Xxxxxxx 00 000
Xxxxx 40 100
Indonesia 40 100
Ireland 10 50
Isreal 40 000
Xxxxx 10 00
Xxxxxxx 00 000
Xxxxx 6 35
Xxxxxx 00 000
Xxxxx 00 000
Xxxxx 15 75
Luxembourg 10 50
Malaysia 10 00
Xxxxxxxxx 00 000
Xxxxxx 15 75
Morocco 40 100
Nepal 00 000
0
Xxxxxxxxxxx 0 00
New Zealand 10 50
Xxxxxx 00 00
Xxxxxxxx 00 000
Xxxx 00 000
Xxxxxxxxxxx 00 000
Poland 40 000
Xxxxxxxx 00 000
Xxxxxxxxx 10 50
Xxxxxxxx 00 000
Xxxxxxxx 50 000
Xxxxx Xxxxxx 15 00
Xxxxx 00 00
Xxx Xxxxx 40 100
Sweden 10 00
Xxxxxxxxxxx 0 00
Xxxxxx 00 000
Xxxxxxxx 15 00
Xxxxxxx 00 000
Xxxxxx 40 000
Xxxxxx Xxxxxxx 0 00
Xxxxxx Xxxxxx 3 25
Uruguay 40 100
Venezuela 40 000
Xxxxxxx 00 000
Xxxxxx 00 000
Xxxxxxxx 00 000
Note: $100,000 annual global custody fee minimum. The Global fees do
not include out-of-pocket expenses (script fees, ad valorum taxes,
re-registration, etc.)
Out-of-Pocket Expenses
The Funds will reimburse Chase for reasonable out-of-pocket expenses
incurred on their behalf.
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