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EXHIBIT 8(p)
[FORM]
NORTHERN FUNDS
ADDENDUM NO. 1 TO THE FOREIGN CUSTODY AGREEMENT
This Addendum No. 1, dated as of the ___ day of _________, 1998, is
entered into between NORTHERN FUNDS (the "Trust"), a Massachusetts business
trust, and THE NORTHERN TRUST COMPANY, an Illinois state bank ("Northern").
WHEREAS, the Trust and Northern have entered into a Foreign Custody
Agreement dated April 1, 1994 (the "Agreement"), pursuant to which the Trust has
appointed Northern to act as custodian to the Trust for its International Growth
Equity, International Select Equity and International Fixed Income Funds
(collectively, the "Funds"); and
WHEREAS, the Trust and Northern desire to enter into this Addendum No.
1 to provide compensation for each Fund for uninvested cash balances maintained
with Northern under the Agreement;
NOW THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Cash Balance Compensation. Northern shall compensate each Fund
for uninvested cash balances maintained with Northern at the
end of each day ("Cash Balance Compensation") in accordance
with this paragraph. Cash Balance Compensation with respect to
each Fund's uninvested cash balance shall be determined at the
end of each day based on an annual rate equal to 96% of the
previous calendar month's average 90-day Treasury ▇▇▇▇
interest rate. The amount of each Fund's accumulated Cash
Balance Compensation shall be paid monthly in the form of
reductions to the custody fees otherwise allocable to the Fund
under the Agreement for such month. In the event that a Fund's
Cash Balance Compensation for any month exceeds the custody
fees payable by the Fund under the Agreement for such month,
the Fund's excess Cash Balance Compensation may be carried
forward and credited against future custody fees, provided
that no excess Cash Balance Compensation may be carried
forward beyond the end of any fiscal year.
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2. Miscellaneous. Except to the extent supplemented hereby, the
Agreement shall remain unchanged and in full force and effect,
and is hereby ratified and confirmed in all respects as
supplemented hereby.
IN WITNESS WHEREOF, the undersigned have executed this Addendum as of
the date and year first above written.
NORTHERN FUNDS
Attest: By:
Name:
Title:
THE NORTHERN TRUST COMPANY
Attest: By:
Name:
Title: