EX-99.G2 10 faif045450_ex99g2.txt Exhibit (g)(2) SUPPLEMENT TO CUSTODIAN AGREEMENT FIRST AMERICAN INVESTMENT FUNDS, INC. FIRST TRUST NATIONAL ASSOCIATION WHEREAS, First American Investment Funds, Inc., a mutual fund organized as a Maryland corporation (hereinafter called the "Fund"), and First Trust National Association, a national banking association organized and existing under the laws of the United States of America with its principal place of business at Minneapolis, Minnesota (hereinafter called the "Custodian"), previously entered into that Custodian Agreement dated September 20, 1993 (the "Custodian Agreement"); and WHEREAS, the Fund has organized a new series referred to as International Fund, and desires to make provision for assets of International Fund to be custodied outside the United States pursuant to sub-custodian arrangements between the Custodian and selected sub-custodians; and WHEREAS, the Fund and the Custodian are entering into this Supplement to the Custodian Agreement in order to permit and provide for such sub-custodian arrangements with respect to International Fund. NOW, THEREFORE, the Fund and the Custodian hereby agree to supplement the Custodian Agreement as follows: 1. Terms Defined in Custodian Agreement. Capitalized terms which are used herein and are not otherwise defined herein shall have the meanings assigned to them in the Custodian Agreement. 2. Appointment of Foreign Sub-Custodians. The Custodian is authorized and instructed, through Bankers Trust Company, to employ as sub-custodians for International Fund's securities and other assets maintained outside of the United States the foreign banking institutions, foreign securities depositories and foreign clearing agencies designated on Schedule A hereto ("Foreign Sub-Custodians"). Upon receipt of Written Order from the Fund, together with a certified resolution of the Fund's Board of Directors, the Custodian and the Fund may agree to amend Schedule A from time to time to designate additional foreign banking institutions, foreign securities depositories and foreign clearing agencies to act as sub-custodians. Each foreign banking institution shall be authorized to deposit securities in foreign securities depositories and foreign clearing agencies authorized pursuant to Rule 17f-5 under the Investment Company Act of 1940, as amended (the "1940 Act"). Upon receipt of Written Order from the Fund, the Custodian shall cease the employment of any one or more of such sub-custodians for maintaining custody of International Fund's assets. 3. Assets to be Held. The Custodian shall limit the securities and other assets maintained in the custody of the Foreign Sub-Custodians to (a) "foreign securities" as defined in paragraph (c)(1) of Rule 17f-5 under the 1940 Act, and (b) cash and cash equivalents in such amount as the Custodian or the Fund may determine to be reasonably necessary in order to effect International Fund's foreign securities transactions. 4. Segregation of Securities. The Custodian shall identify on its books as belonging to International Fund the foreign securities of International Fund held by each Foreign Sub-Custodian. Each agreement pursuant to which the Custodian employs a foreign banking institution as a Foreign Sub-Custodian shall require that such institution establish a custody account for the Custodian on behalf of its customers and physically segregate in that account securities and other assets of the Custodian's customers. Each such agreement also shall provide that, if a Foreign Sub-Custodian deposits International Fund's securities in a foreign securities depository, the Foreign Sub-Custodian shall identify on its books as belonging to the Custodian, as agent for the Custodian's customers, the securities so deposited (all collectively referred to as the "Account"). 5. Agreements with Foreign Banking Institutions. Each agreement with a Foreign Sub-Custodian shall provide that (a) International Fund's assets will not be subject to any right, charge, security interest, lien or claim of any kind in favor of the foreign banking institution or its creditors, except a claim of payment for the safe custody or administration of such assets; (b) beneficial ownership of International Fund's assets will be freely transferable without the payment of money or value other than for custody or administration, which may include payment of stamp duties or government taxes; (c) adequate records will be maintained identifying the assets as belonging to the customers of the Custodian; (d) officers of or auditors employed by, or other representatives of, the Custodian, including independent public accountants for the Fund, will be given access to the books and records of the Foreign Sub-Custodian relating to its actions under its agreement with the Custodian or will be given confirmation of the contents of such books and records; and (e) assets of International Fund held by the Foreign Sub-Custodian will be subject only to the instructions of the Custodian or its agents. 6. Access of Independent Public Accountants of the Fund. Upon request of the Fund, the Custodian will use its best efforts to arrange for the independent public accountants for the Fund to be afforded access to the books and records of any foreign banking institution employed as a Foreign Sub-Custodian insofar as such books and records relate to the performance of such foreign banking institutions under their agreements with the Custodian. 7. Reports by the Custodian. The Custodian will supply to the Fund from time to time, as mutually agreed upon, statements in respect of the securities and other assets of International Fund held by Foreign Sub-Custodians, including but not limited to an identification of entities having possession of International Fund's securities and other assets and advices or notifications of any transfers of securities to or from each custodian account maintained by a Foreign Sub-Custodian on behalf of International Fund indicating, as to securities acquired for International Fund, the identity of the entity having physical possession of such securities. 8. Foreign Securities Transactions. (a) Upon receipt of Written Order from the Fund, which may be continuing instructions when deemed appropriate by the parties, the Custodian shall make or cause the applicable Foreign Sub-Custodian to make transfers, exchanges and deliveries of foreign securities of International Fund, but only (i) in the cases specified in Article 5 of the Custodian Agreement or (ii) as specifically provided for herein. (b) Upon receipt of Written Order from the Fund, which may be continuing instructions when deemed appropriate by the parties, the Custodian shall pay out or cause the applicable Foreign Sub-Custodian to pay out monies of International Fund, but only (i) in the cases specified in Article 3 of the Custodian Agreement or (ii) as specifically provided for herein. (c) Settlement and payment for securities received for the account of International Fund and delivery of securities maintained for the account of International Fund may, upon receipt of Written Order from the Fund, 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. (d) With respect to any transaction involving foreign securities, the Custodian or any Foreign Sub-Custodian in its discretion may cause International Fund to be credited on either the contractual settlement date or the actual settlement date with the proceeds of any sale or exchange of foreign securities from the account of International Fund and to be debited on either the contractual settlement date or the actual settlement date for the cost of foreign securities purchased or acquired for International Fund according to the Custodian's then current internal policies and procedures pertaining to securities settlement, which policies and procedures may change from time to time. The Custodian shall advise the Fund of any changes to such policies and procedures. The Custodian may reverse any such credit or debit made on the contractual settlement date if the transaction with respect to which such credit or debit was made fails to settle within a reasonable period, determined by the Custodian in its discretion, after the contractual settlement date except that if any foreign securities delivered pursuant to this section are returned by the recipient thereof, the Custodian may cause any such credits or debits to be reversed at any time. (e) Securities maintained in the custody of a Foreign Sub-Custodian may be maintained in the name of such entity's nominee to the same extent set forth in Article 4 of the Custodian Agreement. (f) Until the Custodian receives written instructions to the contrary, the Custodian shall collect, or shall cause the applicable Foreign Sub-Custodian to collect, all interest and dividends paid on securities held in International Fund's account, unless such payment is in default. Unless otherwise instructed, the Custodian shall convert interest, dividends and principal received with respect to securities in International Fund's account into United States dollars and shall perform foreign currency contracts for the conversion of United States dollars into foreign currencies for the settlement of trades whenever it is practicable to do so through customary banking channels. Customary banking channels may vary based upon industry practice in each jurisdiction, and shall include the banking facilities of the Custodian's affiliates in accordance with such affiliates' then prevailing internal policies on funds repatriation. All risk and expense incident to such foreign collection and conversions is the responsibility of International Fund's account and the Custodian shall have no responsibility for fluctuations in exchange rates affecting collections or conversions. 9. Foreign Securities Lending. Notwithstanding any other provisions contained herein or in the Custodian Agreement, the Custodian or any Foreign Sub-Custodian shall deliver and receive securities loaned or returned in connection with securities lending transactions only upon and in accordance with Written Order from the Fund; provided, that if the Custodian is not the lending agent in connection with such securities lending, then neither the Custodian nor any Foreign Sub-Custodian shall undertake or otherwise be responsible for (a) marking to market values for such loaned securities, (b) collection of dividends, interest or other disbursements or distributions made with respect to such loaned securities, (c) receipt of corporate action notices, communications, proxies or instruments with respect to such loaned securities, or (d) custody, safekeeping, valuation or any other actions or services with respect to any collateral securing any such securities lending transactions. In the event that the Custodian is the Fund's lending agent in connection with a specific securities loan from International Fund, the Custodian shall undertake to perform all of the duties set forth in the preceding sentence with respect to such loan, except that the Fund shall not receive, nor be entitled to vote, proxies in connection with such loaned security. 10. Liability of Foreign Sub-Custodians. Each agreement pursuant to which the Custodian employs a foreign banking institution as a Foreign Sub-Custodian shall require the institution to exercise reasonable care in the performance of its duties and to indemnify and hold harmless the Custodian and the Custodian's customers from and against any loss, damage, cost, expense, liability or claim arising out of such institution's negligence, fraud, bad faith, willful misconduct or reckless disregard of its duties. At the election of the Fund, it shall be entitled to be subrogated to the right of the Custodian with respect to any claims against a foreign banking institution as a consequence of any such loss, damage, cost, expense, liability or claim if and to the extent that International Fund has not been made whole for any such loss, damage, cost, expense, liability or claim. 11. Monitoring Responsibilities. The Custodian shall furnish annually to the Fund information concerning the Foreign Sub-Custodians employed by the Custodian. Such information shall be similar in kind and scope to that furnished to the Fund in connection with the initial approval hereof. In addition, the Custodian will promptly inform the Fund in the event that the Custodian learns of a material adverse change in the financial condition of a Foreign Sub-Custodian or is notified by a foreign banking institution employed as a Foreign Sub-Custodian that its shareholders' equity has declined, or that there is a substantial likelihood that it will decline, to less than $200 million in United States dollars or the foreign equivalent thereof. 12. Branches of United States Banks. Except as otherwise set forth herein, the provisions hereof shall not apply where the custody of International Fund's assets maintained in a foreign branch of a banking institution which is a "bank" as defined in Section 2(a)(5) of the 1940 Act which meets the qualification set forth in Section 26(a) of the 1940 Act. 13. Expropriation Insurance. The Custodian represents that it does not intend to obtain any insurance for the benefit of International Fund which protects against the imposition of exchange control restrictions or the transfer from any foreign jurisdiction of the proceeds of sale of any securities or against confiscation, expropriation or nationalization of any securities or the assets of the issuer of such securities by a government of any foreign country in which the issuer of such securities is organized or in which securities are held for safekeeping either by the Custodian or any Foreign Sub-Custodian in such country. The Custodian represents that its understanding of the position of the Staff of the Securities and Exchange Commission is that any investment company investing in securities of foreign issuers has the responsibility for reviewing the possibility of the imposition of exchange control restrictions which would affect the liquidity of such investment company's assets and the possibility of exposure to political risk, including the appropriateness of insuring against such risk. 14. Custodian Agreement. The Custodian Agreement, as supplemented hereby, is hereby ratified and confirmed in all respects. IN WITNESS WHEREOF, the Fund and the Custodian have caused this Supplement to be executed by their duly authorized officers. March 15, 1994. FIRST AMERICAN INVESTMENT FUNDS, INC. By /s/ ---------------------------------------- Its Assistant Secretary --------------------------------------- FIRST TRUST NATIONAL ASSOCIATION By /s/ ---------------------------------------- Its Senior Vice President --------------------------------------- SCHEDULE A TO SUPPLEMENT TO CUSTODIAN AGREEMENT ----------------------
COUNTRY SUB-CUSTODIAN DEPOSITORY (IF ANY) ------- ------------- ------------------- Argentina Citibank, N.A., Buenos Aires Caja de Valores Branch Australia Australia and New Zealand Reserve Bank Information and Banking Group Transfer System Austria Creditanstalt-Bankverein Oesterreichische Kontrollbank Bangladesh Standard Chartered Bank, Dhaka Branch Belgium Generale Bank Caisse Interprofessionnelle de Depots et de Virements de Titres S.A. Brazil Citibank, N.A., Sao Paulo Branch Camera de Liquidacao e Custodia S/A Canada The Toronto-Dominion Bank Canadian Depository for Securities Limited Chile Citibank, N.A., Santiago Branch Peoples Republic Standard Chartered Bank, Shenzhen Securities Registrars Co., Ltd. of China (Shenzhen) Shenzhen Branch Colombia Cititrust Colombia, S.A. Sociedad Fiduciaria Denmark Den Danske Bank Vaerdipapircentralen Finland Kansallis-Osake-Pankii The Central Share Register of Finland France Bank Paribas Societe Interprofessionelle de Compensation de Valeurs Mobilieres Germany Dresdner Bank, AG Deutscher Kassenverein Greece National Bank of Greece S.A. Apothetirio Titlon Hong Kong Standard Chartered Bank, Hong Central Clearing and Settlement System Kong Branch India The Hongkong and Shanghai Banking Corporation Limited, Bombay Branch Indonesia Standard Chartered Bank, Jakarta Branch
COUNTRY SUB-CUSTODIAN DEPOSITORY (IF ANY) ------- ------------- ------------------- Italy Citibank, N.A., Milan Branch Monte Titoli, S.p.A. Japan The Bank of Tokyo, Ltd. Japan Securities Depository Center Korea Standard Chartered Bank, Seoul Korea Securities Settlement Corporation Branch Luxembourg Cedel Malaysia Chung Khiaw Bank, Ltd., Malaysian Depository Sdn Bhd Kuala Lumpur Branch Mexico (equity) Instituto para el Deposito de Valores (S.D. Indeval) Mexico (fixed Citibank, N.A., Mexico City income) Branch Netherlands ABN-AMRO Bank Nederlands Centraal Institut voor Giraal Effectenverkeer B.V. New Zealand Australia and New Zealand Austraclear NZ Banking Group Ltd. Norway Euroclear Pakistan Standard Chartered Bank, Karachi Branch Peru Citibank, N.A., Lima Branch Caja de Valores Philippines Standard Chartered Bank, Manila Branch Poland Citibank (Poland), S.A. National Depository of Securities; The National Bank of Poland Portugal Banco Espirito Santo e Comercial Central de Valores Mobiliarios de Lisboa, SA Singapore United Overseas Bank, Ltd. The Central Depository (PTE) Ltd. South Africa First National Bank of Southern Africa, Ltd. Spain Banco Santander Servicio de Compensacion y Liquidacion de Valores Sri Lanka Standard Chartered Bank, Central Depository System Colombo Branch Sweden Svenska Handelsbanken Vardepappercentralen
COUNTRY SUB-CUSTODIAN DEPOSITORY (IF ANY) ------- ------------- ------------------- Switzerland Bankers Trust AG Schweizerische Effekten Giro AG Thailand Standard Chartered Bank, The Share Depository Center Bangkok Branch Turkey Osmanli Bankasi A.S. (Ottoman Bank) United Kingdom/ Bankers Trust Company, London Gilt Settlement Office (Ireland); Central Ireland Branch Gilts Office (United Kingdon) Venezuela Citibank, N.A., Caracas Branch TRANSNATIONAL DEPOSITORIES -------------------------- Cedel Euroclear