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IFund Investments <br /> Each Fund is specifically designed for Minnesota Municipalities. Accordingly, each Fund may <br /> invest only in securities and instruments in which Municipalities are permitted to invest directly, as <br /> delineated in Minnesota Statutes, Section 475.66 ("Permitted Investments"). Permitted Investments <br /> include: <br /> (a) Government bonds, notes, bills, mortgages and other securities which are direct <br /> obligations or are guaranteed or insured issues of the United States, its agencies, its <br /> instrumentalities, or organizations created by an Act of Congress. <br /> (b) Any security which is a general obligation of the State of Minnesota or any of its <br /> municipalities. <br /> (c) Bankers' acceptances of United States banks eligible for purchase by the Federal <br /> Reserve System. <br /> (d) Commercial paper issued by United States corporations or their Canadian subsidiaries <br /> that is of the highest quality and matures in 270 days or less. <br /> (e) Deposits in a national bank or in a state bank or thrift institution insured by the Federal <br /> Deposit Insurance Corporation, provided that any such deposit shall be insured, bonded, or <br /> collateralized as required by law and that any such bank or thrift institution shall meet criteria <br /> 1110 designated from time to time by the Trustees. <br /> (f) Repurchase Agreements with "broker-dealers" (as more fully described below) and with <br /> "banks"(as more fully described below). <br /> 1. Broker/Dealers: <br /> a. The Funds may only enter into repurchase agreements with broker- <br /> dealers which, in the judgment of the Investment Adviser (as defined below), <br /> have a reputation for sound management and ethical business practices. <br /> b. Each broker/dealer must be registered with the Securities and Exchange <br /> Commission and be a primary reporting dealer to the Federal Reserve Bank of <br /> New York. <br /> c. Broker/dealers must have at least $50 million in "Excess Capital". <br /> "Excess Capital" is that portion of a firm's permanent capital which is in excess <br /> of the minimum capital required under the Uniform Net Capital Rule of the <br /> Securities and Exchange Commission. Broker/dealer subsidiaries of companies <br /> having at Ieast $1 billion in net worth shall also be considered creditworthy, in <br /> the event of a lack of publicly available financial information. The Investment <br /> Adviser will use its best efforts to monitor the creditworthiness of <br /> broker/dealers. <br /> 41) <br /> -4- <br />