CUSTODIAN AGREEMENT
FIRST AMERICAN STRATEGIC INCOME PORTFOLIO INC.
U.S. BANK NATIONAL ASSOCIATION
THIS AGREEMENT, is made this ___ day of __________, 2003, by and between
First American Strategic Income Portfolio Inc., a Minnesota corporation
(hereinafter called the "Fund"), and U.S. Bank 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").
WITNESSETH:
WHEREAS, the Fund desires that its securities and cash shall be hereafter
held and administered by the Custodian, pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Fund and the Custodian agree as follows:
ARTICLE 1. DEFINITIONS
The word "Securities" as used herein shall be construed to include, without
being limited to, shares, stocks, treasury stocks, including any stocks of the
Fund, options, notes, bonds, debentures, evidences of indebtedness, certificates
of interest or participation in any profit-sharing agreements, collateral trust
certificates, reorganization certificates or subscriptions, transferable shares,
investment contracts, voting trust certificates, certificates of deposit for a
security, fractional or undivided interests in oil, gas, or other mineral
rights, or any certificates of interest or participation in, temporary or
interim certificates for, receipts for, guarantees of, or warrants or rights to
subscribe to or purchase any of the foregoing, acceptances and other
obligations, and any evidence of any right or interest in or to any property or
assets, financial futures contracts and options thereon, and any other interest
or instrument commonly known as a security or commodity.
The words "Written Order from the Fund" shall mean a request or direction
or certification in writing directed to the Custodian and signed in the name of
the Fund by any two of the individuals designated in the current certified list
referred to in Article 2, provided that one of the individuals so signing shall
be an officer of the Fund designated in said current certified list.
ARTICLE 2. NAMES, TITLES AND SIGNATURES OF FUND'S OFFICERS
The Fund shall certify to the Custodian the names, titles, and signatures
of officers and other persons who are authorized to give Written Orders to the
Custodian on behalf of the Fund. The Fund agrees that, whenever any change in
such authorization occurs, it will file with the Custodian a new certified list
of names, titles, and signatures which shall be signed by at least one officer
previously certified to the Custodian if any such officer still holds an office
in the
Fund. The Custodian is authorized to rely and act upon the names, titles, and
signatures of the individuals as they appear in the most recent such certified
list which has been delivered to the Custodian as hereinbefore provided.
ARTICLE 3. RECEIPT AND DISBURSING OF MONEY
SECTION 1. The Fund shall from time to time cause cash owned by the Fund to
be delivered or paid to the Custodian, but the Custodian shall not be under any
obligation or duty to determine whether all cash of the Fund is being so
deposited or to take any action or to give any notice with respect to cash not
so deposited. The Custodian agrees to hold such cash, together with any other
sum collected or received by it for or on behalf of the Fund. The Custodian
shall make payments of cash for the account of the Fund only:
(a) for bills, statements and other obligations of the Fund (including but
not limited to obligations in connection with the conversion, exchange
or surrender of securities owned by the Fund, interest charges,
dividend disbursements, taxes, management fees, custodian fees, legal
fees, auditors' fees, transfer agents' fees, brokerage commissions,
compensation to personnel, and other operating expenses of the Fund)
pursuant to Written Orders from the Fund setting forth the name of the
person to whom payment is to be made, the amount of the payment, and
the purpose of the payment;
(b) as provided in Article 4 hereof; and
(c) upon the termination of this Agreement.
SECTION 2. The Custodian is hereby appointed the attorney-in-fact of the
Fund to enforce and collect all checks, drafts, or other orders for the payment
of money received by the Custodian for the account of the Fund and drawn to or
to the order of the Fund and to deposit them in said Custodian Account of the
Fund.
ARTICLE 4. RECEIPT OF SECURITIES
The Fund agrees to place all of its Securities in the custody of the
Custodian but the Custodian shall not be under any obligation or duty to
determine whether all Securities of the Fund are being so deposited, or to
require that they be so deposited, or to take any action or give any notice with
respect to the Securities not so deposited. The Custodian agrees to hold such
Securities for the account of the Fund, in the name of the Fund or of bearer or
of a nominee of the Custodian, and in conformity with the terms of this
Agreement. The Custodian also agrees, upon Written Order from the Fund, to
receive from persons other than the Fund and to hold for the account of the Fund
Securities specified in said Written Order, and, if the same are in proper form,
to cause payment to be made therefor to the persons from whom such Securities
were received, from the funds of the Fund held by it in said Custodian Account
in the amounts provided and in the manner directed by the Written Order from the
Fund.
The Custodian agrees that all Securities of the Fund placed in its custody
shall be kept physically segregated at all times from those of any other person,
firm, or corporation, and shall
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be held by the Custodian with all reasonable precautions for the safekeeping
thereof, with safeguards substantially equivalent to those maintained by the
Custodian for its own Securities.
Subject to such rules, regulations, and orders as the Securities and
Exchange Commission may adopt, the Fund may direct the Custodian to deposit all
or any part of the Securities owned by the Fund in a system for the central
handling of Securities established by a national securities exchange or a
national securities association registered with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, or such other person as
may be permitted by the Commission, pursuant to which system all Securities of
any particular class of any issuer deposited within the system are treated as
fungible and may be transferred or pledged by bookkeeping entry without physical
delivery of such Securities, provided that all such deposits shall be subject to
withdrawal only at the direction of the Fund.
ARTICLE 5. TRANSFER, EXCHANGE, AND DELIVERY OF SECURITIES
The Custodian agrees to transfer, exchange, or deliver Securities as
provided in Article 6, or on receipt by it of, and in accordance with, a Written
Order from the Fund in which the Fund shall state specifically which of the
following cases is covered thereby, provided that it shall not be the
responsibility of the Custodian to determine the propriety or legality of any
such order:
(a) In the case of deliveries of Securities sold by the Fund, against
receipt by the Custodian of the proceeds of sale and after receipt of
a confirmation from a broker or dealer with respect to the
transaction;
(b) In the case of deliveries of Securities which may mature or be called,
redeemed, retired, or otherwise become payable, against receipt by the
Custodian of the sums payable thereon or against interim receipts or
other proper delivery receipts;
(c) In the case of deliveries of Securities which are to be transferred to
and registered in the name of the Fund or of a nominee of the
Custodian and delivered to the Custodian for the account of the Fund,
against receipt by the Custodian of interim receipts or other proper
delivery receipts;
(d) In the case of deliveries of Securities to the issuer thereof, its
transfer agent or other proper agent, or to any committee or other
organization for exchange for other Securities to be delivered to the
Custodian in connection with a reorganization or recapitalization of
the issuer or any split-up or similar transaction involving such
Securities, against receipt by the Custodian of such other Securities
or against interim receipts or other proper delivery receipts;
(e) In the case of deliveries of temporary certificates in exchange for
permanent certificates, against receipt by the Custodian of such
permanent certificates or against interim receipts or other proper
delivery receipts;
(f) In the case of deliveries of Securities upon conversion thereof into
other Securities, against receipt by the Custodian of such other
Securities or against interim receipts or other proper delivery
receipts;
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(g) In the case of deliveries of Securities in exchange for other
Securities (whether or not such transactions also involve the receipt
or payment of cash), against receipt by the Custodian of such other
Securities or against interim receipts or other proper delivery
receipts;
(h) In a case not covered by the preceding paragraphs of this Article,
upon receipt of a resolution adopted by the Board of Directors of the
Fund, signed by an officer of the Fund and certified to by the
Secretary, specifying the Securities and assets to be transferred,
exchanged, or delivered, the purposes for which such delivery is being
made, declaring such purposes to be proper corporate purposes, and
naming a person or persons (each of whom shall be a properly bonded
officer or employee of the Fund) to whom such transfer, exchange, or
delivery is to be made; and
(i) In the case of deliveries pursuant to paragraphs (a), (b), (c), (d),
(e), (f), and (g) above, the Written Order from the Fund shall direct
that the proceeds of any Securities delivered, or Securities or other
assets exchanges for or in lieu of Securities so delivered, are to be
delivered to the Custodian.
ARTICLE 6. CUSTODIAN'S ACTS WITHOUT INSTRUCTIONS
Unless and until the Custodian receives contrary Written Orders from the
Fund, the Custodian shall without order from the Fund:
(a) Present for payment all bills, notes, checks, drafts, and similar
items, and all coupons or other income items (except stock dividends),
held or received for the account of the Fund, and which require
presentation in the ordinary course of business, and credit such items
to the aforesaid Custodian Account of the Fund pursuant to Custodian's
then current funds availability schedule; but Custodian shall have no
duty to take action to effect collection of any amount if the assets
upon which such payment is due are in default or if payment is refused
after due demand and presentation;
(b) Present for payment all Securities which may mature or be called,
redeemed, retired, or otherwise become payable and credit such items
to the aforesaid Custodian Account of the Fund pursuant to Custodian's
then current funds availability schedule; but Custodian shall have no
duty to take action to effect collection of any amount if the assets
upon which such payment is due are in default or if payment is refused
after due demand and presentation;
(c) Hold for and credit to the account of the Fund all shares of stock and
other Securities received as stock dividends or as the result of a
stock split or otherwise from or on account of Securities of the Fund,
and notify the Fund promptly of the receipt of such items;
(d) Deposit any cash received by it from, for or on behalf of the Fund to
the credit of the Fund in the aforesaid Custodian Account (in its own
deposit department without liability for interest);
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(e) Charge against the aforesaid Custodian Account for Fund disbursements
authorized to be made by the Custodian hereunder and actually made by
it, and notify the Fund of such charges at least once a month;
(f) Deliver Securities which are to be transferred to and reissued in the
name of the Fund, or of a nominee of the Custodian for the account of
the Fund, and temporary certificates which are to be exchanged for
permanent certificates, to a proper transfer agent for such purpose
against interim receipts or other proper delivery receipts; and
(g) Hold for disposition in accordance with Written Orders from the Fund
hereunder all options, rights, and similar Securities which may be
received by the Custodian and which are issued with respect to any
securities held by it hereunder, and notify the Fund promptly of the
receipt of such items.
ARTICLE 7. DELIVERY OF PROXIES
The Custodian shall deliver promptly to the Fund all proxies, written
notices, and communications with relation to Securities held by it which it may
receive from securities issuers or obligors and/or via the industry standard
information services to which Custodian subscribes.
ARTICLE 8. TRANSFER
The Fund shall furnish to the Custodian appropriate instruments to enable
the Custodian to hold or deliver in proper form for transfer any Securities
which it may hold for the Fund. For the purpose of facilitating the handling of
Securities, unless the Fund shall otherwise direct by Written Order, the
Custodian is authorized to hold Securities deposited with it under this
Agreement in the name of its registered nominee or nominees (as defined in the
Internal Revenue Code and any Regulations of the United States Treasury
Department issued thereunder or in any provision of any subsequent federal tax
law exempting such transaction from liability for stock transfer taxes) and
shall execute and deliver such certificates in connection therewith as may be
required by such laws or regulations or under the laws of any state. The
Custodian shall advise the Fund of the certificate number of each certificate so
presented for transfer and that of the certificate received in exchange
therefor, and shall use its best efforts to the end that the specific Securities
held by it hereunder shall be at all times identifiable.
ARTICLE 9. TRANSFER TAXES AND OTHER DISBURSEMENTS
The Fund shall pay or reimburse the Custodian for any transfer taxes
payable upon transfers of Securities made hereunder, including transfers
incident to the termination of this Agreement, and for all other necessary and
proper disbursements, advances and expenses made or incurred by the Custodian in
the performance or incident to the termination of this Agreement, and the
Custodian shall have a lien upon any cash or Securities held by it for the
account of the Fund for all such items, enforceable, after thirty days' Written
Notice by registered mail to the Fund, by the sale of sufficient Securities to
satisfy such lien. In the event that any advance of funds is made by Custodian
on behalf of the Fund, the Fund agrees to repay the Custodian on demand the
amount of the advance plus accrued interest at the prime rate minus 100 basis
points. The Custodian may reimburse itself by deducting from the proceeds of any
sale of Securities an
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amount sufficient to pay any transfer taxes payable upon the transfer of
Securities sold. The Custodian shall execute such certificates in connection
with Securities delivered to it under this Agreement as may be required, under
the provision of any federal revenue act and any Regulations of the Treasury
Department issued thereunder or any state laws, to exempt from taxation any
transfers and/or deliveries of any such Securities as may qualify for such
exemption.
ARTICLE 10. CUSTODIAN'S LIABILITY FOR PROCEEDS OF SECURITIES SOLD
If the mode of payment for Securities to be delivered by the Custodian is
not specified in the Written Order from the Fund directing such delivery, the
Custodian shall make delivery of such Securities against receipt by it of cash,
a postal money order or a check drawn by a bank, trust company, or other banking
institution, or by a broker named in such Written Order from the Fund, for the
amount the Custodian is directed to receive. The Custodian shall be liable for
the proceeds of any delivery of Securities made pursuant to this Article, but
provided that it has complied with the provisions of this Article, only to the
extent that such proceeds are actually received.
ARTICLE 11. CUSTODIAN'S REPORT
The Custodian shall furnish the Fund, as of the close of business on the
last business day of each month, a statement showing all cash transactions and
entries for the account of the Fund. The books and records of the Custodian
pertaining to its actions as Custodian under this Agreement shall be open to
inspection and audit, at reasonable times, by officers of, and auditors employed
by, the Fund. The Custodian shall furnish the Fund with a list of the Securities
held by it in custody for the account of the Fund as of the close of business on
the last business day of each quarter of the Fund's fiscal year.
ARTICLE 12. CUSTODIAN'S COMPENSATION
The Custodian shall be paid compensation at such rates and at such times as
may from time to time be agreed on in writing by the parties hereto, and the
Custodian shall have a lien for unpaid compensation, to the date of termination
of this Agreement, upon any cash or Securities held by it for the Fund,
enforceable in the manner specified in Article 9 hereof. Unless and until the
Funds and the Custodian agree otherwise in writing, such compensation to the
Custodian shall be payable monthly at the annual rate, as a percentage of the
Fund's average daily assets, of 0.015%.
ARTICLE 13. DURATION, TERMINATION AND AMENDMENT OF AGREEMENT
This Agreement shall remain in effect, as it may from time to time be
amended, until it shall have been terminated as hereinafter provided, but no
such alteration or termination shall affect or impair any rights or liabilities
arising out of any acts or omissions to act occurring prior to such amendment or
termination.
The Custodian may terminate this Agreement by giving the Fund ninety days
written notice of such termination by registered mail addressed to the Fund at
its principal place of business.
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The Fund may terminate this Agreement by giving ninety days written notice
thereof delivered, together with a copy of the resolution of the Board of
Directors authorizing such termination and certified by the Secretary of the
Fund, by registered mail to the Custodian at its principal place of business.
Upon termination of this Agreement, the assets of the Fund held by the
Custodian shall be delivered by the Custodian to a successor custodian upon
receipt by the Custodian of a copy of the resolution of the Board of Directors
of the Fund, certified by the Secretary, designating the successor custodian;
and if no successor custodian is designated the Custodian shall, upon such
termination, deliver all such assets to the Fund.
This Agreement may be amended at any time by the mutual agreement of the
Fund and the Custodian. This Agreement may not be assigned by the Custodian
without the consent of the Fund, authorized or approved by a resolution of its
Board of Directors.
ARTICLE 14. SUCCESSOR CUSTODIAN
Any bank or trust company into which the Custodian or any successor
custodian may be merged or converted or with which it or any successor custodian
may be consolidated, or any bank or trust company resulting from any merger,
conversion or consolidation to which the Custodian or any successor custodian
shall be a party, or any bank or trust company succeeding, to the business of
the Custodian, shall be and become the successor custodian without the execution
of any instrument or any further act on the part of the Fund or the Custodian or
any successor custodian.
Any successor custodian shall have all the power, duties, and obligations
of the preceding custodian under this Agreement and any amendments thereof and
shall succeed to all the exemptions and privileges of the preceding custodian
under this Agreement and any amendments thereof.
ARTICLE 15. GENERAL
Nothing expressed or mentioned in or to be implied from any provisions of
this Agreement is intended to give or shall be construed to give any person or
corporation other than the parties hereto any legal or equitable right, remedy
or claim under or in respect of this Agreement or any covenant, condition or
provision herein contained, this Agreement and all of the covenants, conditions
and provisions hereof being intended to be, and being, for the sole and
exclusive benefit of the parties hereto and their respective successors and
assigns.
It is the purpose and intention of the parties hereto that the Fund shall
retain all the power, rights and responsibilities of determining policy,
exercising discretion and making decisions with respect to the purchase, or
other acquisitions, and the sale, or other disposition, of all of its
Securities, and that the duties and responsibilities of the Custodian hereunder
shall be limited to receiving and safeguarding the assets and Securities of the
Fund and to delivering or disposing of them pursuant to the Written Order of the
Fund as aforesaid and the Custodian shall have no authority, duty or
responsibility for the investment policy of the Fund or for any acts of the Fund
in buying or otherwise acquiring, or in selling or otherwise disposing of, any
Securities, except as hereinbefore specifically set forth.
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The Custodian shall in no case or event permit the withdrawal of any money
or Securities of the Fund upon the mere receipt of any director, officer,
employee or agent of the Fund, but shall hold such money and Securities for
disposition under the procedures herein set forth.
ARTICLE 16. INSTRUCTIONS TO CUSTODIAN
The Custodian may, when it deems it expedient, apply to the Fund, or to
counsel for the Fund, or to its own counsel, for instructions and advice; and
the Custodian shall not be liable for any action taken by it in accordance with
the written instructions or advice of the Fund or of counsel for the Fund.
ARTICLE 17. INDEMNIFICATION, ETC.
The Custodian shall hold harmless and indemnify the Fund from and against
any claims, loss, liability or expense (collectively a "Claim") arising out of
the Custodian's failure to comply with the terms of this Agreement or arising
out of the Custodian's negligence, willful misconduct, or bad faith. The
Custodian shall not be liable for consequential, special or punitive damages.
The Custodian may reasonably request and obtain the advice and opinion of
counsel for the Fund, or of its own counsel with respect to questions or matters
of law, and it shall be without liability to the Fund for any action taken or
omitted by it in good faith, in conformity with such advice or opinion.
The Fund agrees to indemnify and hold the Custodian harmless from and
against any Claim arising from the Custodian's performance of its duties
hereunder or its actions taken at the direction of the Fund, provided that the
Custodian shall not be indemnified for any Claim arising out of the Custodian's
failure to comply with the terms of this Agreement or arising out of the
Custodian's negligence, bad faith or willful misconduct. The Fund shall not be
liable for consequential, special or punitive damages.
The Custodian may rely upon the advice of the Fund and upon statements of
the Fund's accountants and other persons believed by it in good faith to be
experts in matters upon which they are consulted, and the Custodian shall not be
liable for any actions taken in good faith without negligence in reliance upon
such statements.
If the Fund requires the Custodian in any capacity to take, with respect to
any securities, any action which involves the payment of money by it, or which
in the Custodian's opinion might make it or its nominee liable for payment of
monies or in any other way, the Custodian, upon notice to the Fund given prior
to such actions, shall be and be kept indemnified by the Fund in an amount and
form satisfactory to the Custodian against any liability on account of such
action.
The Custodian shall be entitled to receive, and the Fund agrees to pay to
the Custodian, on demand, reimbursement for such cash disbursements, costs and
expenses as may be agreed upon from time to time by the Custodian and the Fund.
The Custodian shall be protected in acting as custodian hereunder upon any
instructions, advice, notice, request, consent, certificate or other instrument
or paper reasonably appearing to it to be genuine and to have been properly
executed and shall, unless otherwise specifically
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provided herein, be entitled to receive as conclusive proof of any fact or
matter required to be ascertained from the Fund hereunder, a certificate signed
by the Fund's President, or other officer specifically authorized for such
purpose.
Without limiting the generality of the foregoing, the Custodian shall be
under no duty or obligation to inquire into, and shall not be liable for:
(a) The validity of the issue of any securities purchased by or for the
Fund, the legality of the purchase thereof or evidence of ownership
required by the Fund to be received by Custodian, or the propriety of
the decision to purchase or amount paid therefore; or
(b) The legality of the sale of any securities by or for the Fund, or the
propriety of the amount for which the same are sold.
The Custodian shall not be liable for any loss or diminution of securities
by reason of investment experience or for its actions taken in reliance upon an
instruction from the Fund.
The Custodian shall not be liable for, or considered to be Custodian of,
any money represented by any check, draft, wire transfer, clearing house funds,
uncollected funds, or instrument for the payment or money received by it on
behalf of the Fund, until the Custodian actually receives such money, provided
only that it shall advise the Fund promptly if it fails to receive any such
money in the ordinary course of business, and use its best efforts and cooperate
with the Fund toward the end that such money shall be received.
The Custodian shall not be responsible for loss occasioned by the acts,
neglect, defaults or insolvency of any broker, bank trust company, or any other
person with whom the Custodian may deal in the absence of negligence, or bad
faith on the part of the Custodian.
ARTICLE 18. EFFECTIVE DATE
This agreement shall become effective when it is executed and delivered by
the parties hereto, which date shall not precede the date it shall have been
approved by the Board of Directors of the Fund. The Fund shall transmit to the
Custodian promptly after such approval by said Board of Directors a copy of its
resolution embodying such approval, certified by the Secretary of the Fund.
ARTICLE 19. GOVERNING LAW
This agreement is executed and delivered in Minneapolis, Minnesota and the
laws of the State of Minnesota shall be controlling and shall govern the
construction, validity and effect of this contract.
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IN WITNESS WHEREOF, the Fund and the Custodian have caused this Agreement
to be executed in duplicate as of the date first above written by their duly
authorized officers.
FIRST AMERICAN STRATEGIC INCOME PORTFOLIO
INC.
By
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Its
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U.S. BANK NATIONAL ASSOCIATION
By
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Its
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