EXHIBIT (8)(D)
AMENDMENT TO THE CUSTODIAN CONTRACT
AGREEMENT made by and between State Street Bank and Trust Company (the
"Custodian") and CGM Trust (the "Fund") with respect to CGM Fixed Income Fund, a
Series of the Fund (the "Series").
WHEREAS, the Custodian and the Fund are parties to a custodian contract
dated March 6, 1992 (the "Custodian Contract") governing the terms and
conditions under which the Custodian maintains custody of the securities and
other assets of the Fund; and
WHEREAS, the Custodian and the Fund desire to amend the Custodian Contract
to provide for the maintenance of the Fund's foreign securities, and cash
incidental to transactions in such securities, in the custody of certain foreign
banking institutions and foreign securities depositories acting as
sub-custodians in conformity with the requirements of Rule 17f-5 under the
Investment Company Act of 1940;
NOW THEREFORE, in consideration of the premises and covenants contained
herein, the Custodian and the Fund hereby amend the Custodian Contract by the
addition of the following terms and conditions;
1. Appointment of Foreign Sub-Custodians
The Fund hereby authorizes and instructs the Custodian to employ as
sub-custodians for the Fund's securities and other assets maintained outside the
United States the foreign banking institutions and foreign securities
depositories designated on Schedule A hereto ("foreign sub-custodians"). Upon
receipt of "Proper Instructions", as defined in Section 2.16 of the Custodian
Contract, together with a certified resolution of the Fund's Board of Directors,
the Custodian and the Fund may agree to amend Schedule A hereto from time to
time to designate additional foreign banking institutions and foreign securities
depositories to act as sub-custodian. Upon receipt of Proper Instructions, the
Fund may instruct the Custodian to cease the employment of any one or more of
such sub-custodians for maintaining custody of the Fund's assets.
2. 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 Investment Company Act of 1940, and
(b) cash and cash equivalents in such amounts as the Custodian or the Fund may
determine to be reasonably necessary to effect the Fund's foreign securities
transactions.
3. Foreign Securities Depositories
Except as may otherwise be agreed upon in writing by the Custodian and the
Fund, assets of the Fund shall be maintained in foreign securities depositories
only through arrangements implemented by the foreign banking institutions
serving as sub-custodians pursuant to the terms hereof. Where possible, such
arrangements shall include entry into agreements containing the provisions set
forth in Section 5 hereof.
4. Segregation of Securities
The Custodian shall identify on its books as belonging to the Fund, the
foreign securities of the Fund held by each foreign sub-custodian. Each
agreement pursuant to which the Custodian employs a foreign banking institution
shall require that such institution establish a custody account for the
Custodian on behalf of the Fund and physically segregate in that account,
securities and other assets of the Fund, and, in the event that such institution
deposits the Fund's securities in a foreign securities depository, that it shall
identify on its books as belonging to the Custodian, as agent for the Fund, the
securities so deposited.
5. Agreements with Foreign Banking Institutions
Each agreement with a foreign banking institution shall be substantially in
the form set forth in Exhibit 1 hereto and shall provide that: (a) the 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
or agents, except a claim of payment for their safe custody or administration;
(b) beneficial ownership for the Fund's assets will be freely transferable
without the payment of money or value other than for custody or administration;
(c) adequate records will be maintained identifying the assets as belonging to
the Fund; (d) officers of or auditors employed by, or other representatives of
the Custodian, including to the extent permitted under applicable law the
independent public accountants for the Fund, will be given access to the books
and records of the foreign banking institution relating to its actions under its
agreement with the Custodian; and (e) assets of the Fund held by the foreign
sub-custodian will be subject only to the instructions of the Custodian or its
agents.
6. Access of Independent Accountants of the Fund
Upon request of the Fund, the Custodian will use its best efforts to arrange
for the independent accountants of 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 institution under its agreement with the Custodian.
7. Reports by 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 the Fund held
by foreign sub-custodians, including but not limited to an identification of
entities having possession of the Fund's securities and other assets and advices
or notifications of any transfers of securities to or from each custodial
account maintained by a foreign banking institution for the Custodian on behalf
of the Fund indicating, as to securities acquired for the Fund, the identity of
the entity having physical possession of such securities.
8. Transactions in Foreign Custody Account
(a) Except as otherwise provided in paragraph (b) of this Section 8, the
provisions of Sections 2.2 and 2.8 of the Custodian Contract shall apply,
mutatis mutandis to the foreign securities of the Fund held outside the United
States by foreign sub-custodians.
(b) Notwithstanding any provision of the Custodian Contract to the contrary,
settlement and payment for securities received for the account of the Fund and
delivery of securities maintained for the account of the Fund may be effected in
accordance with the customary 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.
(c) 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 as set forth
in Section 2.3 of the Custodian Contract, and the Fund agrees to hold any such
nominee harmless from any such liability as a holder of record of such
securities.
9. 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 each Fund from and against any loss, damage, cost,
expense, liability or claim arising out of or in connection with the
institution's performance of such obligations. At the election of the Fund, it
shall be entitled to be subrogated to the rights 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 the
Fund has not been made whole for any such loss, damage, cost, expense, liability
or claim.
10. Liability of Custodian
The Custodian shall be liable for the acts or omissions of a foreign banking
institution to the same extent as set forth with respect to sub-custodians
generally in the Custodian Contract and, regardless of whether assets are
maintained in the custody of a foreign banking institution, a foreign securities
depository or a branch of a U.S. bank as contemplated by paragraph 13 hereof,
the Custodian shall not be liable for any loss, damage, cost, expense, liability
or claim resulting from nationalization, expropriation, currency restrictions,
or acts of war or terrorism or any loss where the sub-custodian has otherwise
exercised reasonable care. Notwithstanding the foregoing provisions of this
paragraph 10, in delegating custody duties to State Street London Ltd., the
Custodian shall not be relieved of any responsibility to the Fund for any loss
due to such delegation, except such loss as may result from (a) political risk
(including, but not limited to, exchange control restrictions, confiscation,
expropriation, nationalization, insurrection, civil strife or armed hostilities)
or (b) other losses (excluding a bankruptcy or insolvency of State Street London
Ltd. not caused by political risk) due to Acts of God, nuclear incident or other
losses under circumstances where the Custodian and State Street London Ltd. have
exercised reasonable care.
11. Reimbursement for Advances
If the Fund requires the Custodian to advance cash or securities for any
purpose including the purchase or sale of foreign exchange or of contracts for
foreign exchange, or in the event that the Custodian or its nominee shall incur
or be assessed any taxes, charges, expenses, assessments, claims or liabilities
in connection with the performance of this Contract, except such as may arise
from its or its nominee's own negligent action, negligent failure to act or
willful misconduct, property at any time held for the account of the Fund, not
to exceed 10% of the Fund's gross assets, shall be security therefor and should
the Fund fail to repay the Custodian promptly, the Custodian shall be entitled
to utilize available cash and to dispose of the Fund assets to the extent
necessary to obtain reimbursement.
12. Monitoring Responsibilities
The Custodian shall furnish annually to the Fund, during the month of June,
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 of this amendment to the Custodian
Contract. 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 any material loss of the assets of the
Fund or in the case of any foreign sub-custodian not the subject of an exemptive
order from the Securities and Exchange Commission is notified by such foreign
sub-custodian that there appears to be a substantial likelihood that its
shareholders' equity will decline below $200 million (U.S. dollars or the
equivalent thereof) or that its shareholders' equity has declined below $200
million (in each case computed in accordance with generally accepted U.S.
accounting principles).
13. Branches of U.S. Banks
(a) Except as otherwise set forth in this amendment to the Custodian
Contract, the provisions hereof shall not apply where the custody of the Fund
assets is maintained in a foreign branch of a banking institution which is a
"bank" as defined by Section 2(a)(5) of the Investment Company Act of 1940
meeting the qualification set forth in Section 26(a) of said Act. The
appointment of any such branch as a sub-custodian shall be governed by paragraph
1 of the Custodian Contract.
(b) Cash held for the Fund in the United Kingdom shall be maintained in an
interest bearing account established for the Fund with the Custodian's London
Branch, which account shall be subject to the direction of the Custodian, State
Street London Ltd. or both.
14. Applicability of Custodian Contract
Except as specifically superseded or modified herein, the terms and
provisions of the Custodian Contract shall continue to apply with full force and
effect.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 16th day of April, 1992.
ATTEST: CGM TRUST
/s/Xxxxxx X. Lake By: /s/Xxxxxx X. Xxxx
-------------------------------------- ----------------------
(Title) President
ATTEST: STATE STREET BANK AND
AND TRUST COMPANY
/s/[illegible] By: /s/[illegible]
------------------------------------- --------------------------
Assistant Secretary Sr. Vice President
SCHEDULE A
The following foreign banking institutions, foreign branches of U.S. banks
and foreign securities depositories have been approved by the Board of Directors
of CGM Trust for use as sub-custodians for the Fund's securities and other
assets.
Foreign Custodians
Australia and New Zealand Banking Group Limited (ANZ) -- Australia Canada
Trust Company -- Canada Kansallis-Osake-Pankki (KOP) -- Finland Credit
Commercial De France (CCF) -- France Berliner Handels-und Frankfurter Bank
(BHF) -- Germany Standard Chartered Bank, Hong Kong -- Hong Kong Standard
Chartered Bank, Jakarta -- Indonesia Credito Italiano -- Italy Sumitomo
Trust & Banking Co., Ltd. (Sumitomo) -- Japan Bank of Seoul -- Korea Westpac
Banking Corporation (Westpac) -- New Zealand Standard Chartered Bank, Manila
-- Philippines Union Bank of Switzerland -- Switzerland Xxxxx Xxxxxx Xxxxxx
Xxxxxxx -- Xxxxxx Xxxxxxx
Foreign Branches of U.S. Banks
Branches of Citibank, N.A. in Argentina, Brazil, Mexico and Venezuela
Depositories
Caja de Valores (CDV) -- Argentina
Austraclear Limited -- Australia
Bolsa de Valores de Sao Paulo (Bovespa) -- Brazil Canadian Depository for
Securities Limited (CDS) -- Canada Societe Interprofessionnelle pour la
Compensation des Valeurs Mobilieres (SICOVAM) -- France The Deutscher
Kassenverein AG -- Germany Monte Titoli S.P.A. -- Italy Instituto Nacional
para el Deposito de Valores (INDEVAL) -- Mexico Schweizerische Effekten-Giro
AG (SEGA) -- Switzerland The Central Gilts Office (CGO) -- United Kingdom
The Euroclear System, Belgium (Euroclear) -- Transnational Centrale de
Livraison de Valeurs Mobilieres, S.A., Luxembourg (Cedel) -- Transnational
Certified:
/s/Xxxxxx X. Xxxx
------------------------------
Fund's Authorized Officer
Dated: April 16, 1992
ZP-8384/C
EXHIBIT 1
CUSTODIAN AGREEMENT
TO:
Gentlemen:
The undersigned ("State Street") hereby requests that you (the "Bank")
establish a custody account and a cash account for each State Street client
whose account is identified to this Agreement. Each such custody or cash account
as applicable will be referred to herein as the "Account" and will be subject to
the following terms and conditions:
1. The Bank shall hold as agent for State Street and shall physically
segregate in the Account such cash, bullion, coin, stocks, shares, bonds,
debentures, notes and other securities and other property which is delivered to
the Bank for that State Street Account (the "Property").
2. (a) Without the prior approval of State Street it will not deposit
securities in any securities depository or utilize a clearing agency,
incorporated or organized under the laws of a country other than the United
States, unless such depository or clearing house operates the central system for
handling of securities or equivalent book-entries in that country or operates a
transnational system for the central handling of securities or equivalent
book-entries.
(b) When Securities held for an Account are deposited in a securities
depository or clearing agency by the Bank, the Bank shall identify on its books
as belonging to State Street as agent for such Account, the Securities so
deposited.
The Bank represents that either:
3. (a) It currently has stockholders' equity in excess of $200 million
(U.S. dollars or the equivalent of U.S. dollars computed in accordance with
generally accepted U.S. accounting principles) and will promptly inform State
Street in the event that there appears to be a substantial likelihood that its
stockholders' equity will decline below $200 million, or in any event, at such
time as its stockholders' equity in fact declines below $200 million; or
(b) It is the subject of an exemptive order issued by the United States
Securities and Exchange Commission, which such order permits State Street to
employ the Bank as a subcustodian, notwithstanding the fact that the Bank's
stockholders' equity is currently below $200 million or may in the future
decline below $200 million due to currency fluctuation.
4. Upon the written instructions of State Street as permitted by Sections 8,
the Bank is authorized to pay out cash from the Account and to sell, assign,
transfer, deliver or exchange, or to purchase for the Account, any and all
stocks, shares, bonds, debentures, notes and other securities ("Securities"),
bullion, coin and other property, but only as provided in such written
instructions. The Bank shall not be held liable for any act or omission to act
on instructions given or purported to be given should there be any error in such
instructions.
5. Unless the Bank receives written instructions of State Street to the
contrary, the Bank is authorized:
a. To promptly receive and collect all income and principal with respect to
the Property and to credit cash receipts to the Account;
b. To promptly exchange Securities where the exchange is purely ministerial
(including, without limitation, the exchange of temporary Securities for
those in definitive form and and the exchange of warrants, or other
documents of entitlement to Securities, for the Securities themselves);
c. To promptly surrender Securities at maturity or when called for
redemption upon receiving payment therefor;
d. Whenever notification of a rights entitlement or a fractional interest
resulting from a rights issue, stock dividend or stock split is received
for the Account and such rights entitlement or fractional interest bears
an expiration date, the Bank will endeavor to obtain State Street's
instructions, but should these not be received in time for the Bank to
take timely action, the Bank is authorized to sell such rights
entitlement or fractional interest and to credit the Account;
e. To hold registered in the name of the nominee of the Bank or its agents
such Securities as are ordinarily held in registered form;
f. To execute in State Street's name for the Account, whenever the Bank
deems it appropriate, such ownership and other certificates as may be
required to obtain the payment of income from the Property; and
g. To pay or cause to be paid from the Account any and all taxes and levies
in the nature of taxes imposed on such assets by any governmental
authority, and shall use reasonable efforts to promptly reclaim any
foreign withholding tax relating to the Account.
6. If the Bank shall receive any proxies, notices, reports, or other
communications relative to any of the Securities of the Account in connection
with tender offers, reorganizations, mergers, consolidations, or similar events
which may have an impact upon the issuer thereof, the Bank shall promptly
transmit any such communication to State Street by means as will permit State
Street to take timely action with respect thereto.
7. The Bank is authorized in its discretion to appoint brokers and agents in
connection with the Bank's handling of transactions relating to the Property
provided that any such appointment shall not relieve the Bank of any of its
responsibilities or liabilities hereunder.
8. Written instructions shall include (i) instructions in writing signed by
such persons as are designated in writing by State Street (ii) telex or tested
telex instructions of State Street, (iii) other forms of instruction in computer
readable form as shall be customarily utilized for the transmission of like
information and (iv) such other forms of communication as from time to time
shall be agreed upon by State Street and the Bank.
9. The Bank shall supply periodic reports with respect to the safekeeping of
assets held by it under this Agreement. The content of such reports shall
include but not be limited to any transfer to or from any Account held by the
Bank hereunder and such other information as State Street may reasonably
request.
10. In addition to its obligations under Section 2 hereof, the Bank shall
maintain such other records as may be necessary to identify the assets hereunder
as belonging to each State Street client identified to this Agreement from time
to time.
11. The Bank agrees that its books and records relating to its actions under
this Agreement shall be opened to the physical, on-premises inspection and audit
at reasonable times by officers of, auditors employed by or other
representatives of State Street (including to the extent permitted under _______
law the independent public accountants for any entity whose Property is
being held hereunder) and shall be retained for such period as shall be agreed
by State Street and the Bank.
12. The Bank shall be entitled to reasonable compensation for its services
and expenses as custodian under this Agreement, as agreed upon from time to time
by the Bank and State Street.
13. The Bank shall exercise reasonable care in the performance of its duties
as are set forth or contemplated herein or contained in instructions given to
the Bank which are not contrary to this Agreement, and shall maintain adequate
insurance and agrees to indemnify and hold State Street and each Account from
and against any loss, damage, cost, expense, liability or claim arising out of
or in connection with the Bank's performance of its obligations hereunder.
14. The Bank agrees that (i) the Property is not subject to any right,
charge, security interest, lien or claim of any kind in favor of the Bank or any
of its agents or its creditors except a claim of payment for their safe custody
and administration and (ii) the beneficial ownership of the Property shall be
freely transferable without the payment of money or other value other than for
safe custody or administration.
15. This Agreement may be terminated by the Bank or State Street by at least
60 days' written notice to the other, sent by registered mail or express
courier. The Bank, upon the date this Agreement terminates pursuant to notice
which has been given in a timely fashion, shall deliver the Property in
accordance with written instructions of State Street specifying the name(s) of
the person(s) to whom the Property shall be delivered.
16. The Bank and State Street shall each use its best efforts to maintain
the confidentiality of the Property in each Account, subject, however, to the
provisions of any laws requiring the disclosure of the Property.
17. The Bank agrees to follow such Operating Requirements as State Street
may require from time to time. A copy of the current State Street Operating
Requirements is attached as an exhibit to this Agreement.
18. Unless otherwise specified in this Agreement, all notices with respect
to matters contemplated by this Agreement shall be deemed duly given when
received in writing or by tested telex by the Bank or State Street at their
respective addresses set forth below, or at such other address as specified in
each case in a notice similarly given:
To State Street: Global Custody Services Division
STATE STREET BANK AND TRUST COMPANY
X.X. Xxx 000
Xxxxxx, Xxxxxxxxxxxxx 00000
To the Bank:
19. This Agreement shall be governed by and construed in accordance with
the laws of ______________.
Please acknowledge your agreement to the foregoing by executing a copy of
this letter.
Very truly yours,
STATE STREET BANK AND TRUST COMPANY
By -------------------------------------
Agreed to by:
By -----------------------------
Date ---------------------------
