EXHIBIT (g)(3)
SUPPLEMENT TO CUSTODIAN AGREEMENT
FIRST AMERICAN STRATEGY FUNDS, INC.
U.S. BANK NATIONAL ASSOCIATION
WHEREAS, First American Strategy Funds, Inc., a mutual fund organized
as a Minnesota 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, previously entered into that
Custodian Agreement dated October 1, 1996. (the "Custodian Agreement"); and
WHEREAS, First Trust National Association, with the consent of the
Fund, assigned its rights and obligations under the Custodian Agreement to U.S.
Bank National Association, a national banking association organized and existing
under the laws of the United States of America (the "Custodian") by an
Assignment and Assumption Agreement dated as of May 1, 1998; and
WHEREAS, the Fund and the Custodian wish to supplement the Custodian
Agreement as set forth herein.
NOW, THEREFORE, the Fund and the Custodian hereby agree that:
1. Custodian shall hold harmless and indemnify Fund from and against
any claims, loss, liability or expense (collectively a "Claim")
arising out of Custodian's failure to comply with the terms of
this Agreement or arising out of Custodian's negligence, willful
misconduct, or bad faith. Custodian shall not be liable for
consequential, special or punitive damages. Custodian may
reasonably request and obtain the advice and opinion of counsel
for Fund, or of its own counsel with respect to questions or
matters of law, and it shall be without liability to Fund for any
action taken or omitted by it in good faith, in conformity with
such advice or opinion.
2. 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 Custodian's failure to comply with the
terms of this Agreement or arising out of Custodian's negligence,
bad faith or willful misconduct. Fund shall not be liable for
consequential, special or punitive damages.
3. Custodian may rely upon the advice of Fund and upon statements of
Fund's accountants and other persons believed by it in good
faith, to be experts in matters upon which they are consulted,
and Custodian shall not be liable for any actions taken, in good
faith without negligence in reliance upon such statements.
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4. If Fund requires Custodian in any capacity to take, with respect
to any securities, any action which involves the payment of money
by it, or which in Custodian's opinion might make it or its
nominee liable for payment of monies or in any other way,
Custodian, upon notice to Fund given prior to such actions, shall
be and be kept indemnified by Fund in an amount and form
satisfactory to Custodian against any liability on account of
such action.
5. Custodian shall be entitled to receive, and Fund agrees to pay to
Custodian, on demand, reimbursement for such cash disbursements,
costs and expenses as may be agreed upon from time to time by
Custodian and Fund.
6. 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 provided herein, be entitled to
receive as conclusive proof of any fact or matter required to be
ascertained from Fund hereunder, a certificate signed by the
Fund's President, or other officer specifically authorized for
such purpose.
7. Without limiting the generality of the foregoing, 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 Fund, the legality of the purchase thereof or evidence
of ownership required by 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 Fund,
or the propriety of the amount for which the same are sold.
8. 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 Fund.
9. 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 Fund, until
Custodian actually receives such money, provided only that it
shall advise Fund promptly if it fails to receive any such money
in the ordinary course of business, and use its best efforts and
cooperate with Fund toward the end that such money shall be
received.
10. 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 Custodian may deal in the
absence of negligence, or bad faith on the part of Custodian.
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IN WITNESS WHEREOF, the parties have caused this Supplement to be duly
executed and delivered as of December 8, 1999.
FIRST AMERICAN STRATEGY FUNDS, INC.
By /s/
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Its Vice President
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U.S. BANK NATIONAL ASSOCIATION
By /s/ Xxxxxxx X. Xxxxxx
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Its SVP
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