AMENDMENT TO THE CUSTODIAN AGREEMENT
AGREEMENT made by and between State Street Bank and Trust Company (the
"Custodian") and Trust for Credit Unions (the "Fund").
WHEREAS, the Custodian and the Fund are parties to a Custodian Agreement
dated May 10, 1988 (as amended, the "Custodian Agreement") governing the terms
and conditions under which the Custodian maintains custody of the securities and
other assets of the Fund;
WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940 ("1940 Act") with authority to operate
as a series company with multiple portfolios, and pursuant to section 18(f)(2)
of the 1940 Act each series of the Fund's Units, representing the interest in a
portfolio, is preferred over all other series in respect of the assets
specifically allocated to such portfolio; and
WHEREAS, the Custodian and the Fund desire to amend the Custodian Agreement
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
organizations acting as subcustodians in conformity with the requirements of
Rule 17f-5 under the 1940 Act;
NOW THEREFORE, in consideration of the premises and covenants contained
herein, the Custodian and the Fund hereby amend the Custodian Agreement by the
addition of the following terms and conditions;
1. APPOINTMENT OF FOREIGN SUBCUSTODIANS. The Fund hereby authorizes and
instructs the Custodian to employ as subcustodians for the Fund's securities and
other assets maintained outside the United States the foreign banking
institutions, foreign trust companies, foreign securities depositories, and
foreign clearing agencies designed at Schedule A hereto ("foreign
subcustodians"). Upon receipt of "Proper Instructions", as defined in Section 9
of the Custodian Agreement, together with a certified resolution of the Fund's
Board of Trustees, the Custodian and the Fund may agree to amend Schedule A
hereto from time to time to designate additional foreign banking institutions,
foreign trust companies, foreign securities depositories and foreign clearing
agencies to act as subcustodians. Upon receipt of Proper Instructions, the Fund
may instruct the Custodian to cease the employment of any one or more of such
subcustodians 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 subcustodians to: (a) "foreign
securities," as defined in paragraph (c)(1) of Rule 17f-5 under the 1940 Act;
and (b) cash and cash equivalents in such amounts as the Custodian or the Fund
may
1
determine to be reasonably necessary to effect the Fund's foreign securities
transactions.
3. FOREIGN SECURITIES DEPOSITORIES AND CLEARING AGENCIES. 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 and clearing
agencies only through arrangements, implemented by the foreign banking
institutions and foreign trust companies serving as subcustodians 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 (designating the particular portfolio thereof), the
foreign securities and related cash and cash equivalents of such portfolio held
by each foreign subcustodian. Each agreement pursuant to which the Custodian
employs a foreign banking institution or foreign trust company shall require
that such institution establish a custody account for the Custodian on behalf of
the Fund (designating the particular portfolio thereof) and physically segregate
in that account the securities and other assets of such portfolio and, in the
event that such institution deposits the portfolio's securities in a foreign
securities depository, that it shall identify on its books as belonging to the
Custodian, as agent for the Fund (designating the particular portfolio thereof),
the securities so deposited.
5. AGREEMENTS WITH FOREIGN BANKING INSTITUTIONS. Each agreement with a
foreign banking institution and foreign trust company shall be substantially in
the form set forth in Exhibit 1 hereto and shall provide that:
(a) The assets of the Fund's portfolio will not be subject to any
right, charge, security interest, lien or claim of any kind in
favor of the foreign banking institution or foreign trust company
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 such portfolio;
(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 or foreign trust company relating to its actions
under its agreement with the Custodian; and
2
(e) Assets of the Fund held by the foreign subcustodian 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 or foreign trust company employed as a foreign
subcustodian insofar as such books and records relate to the performance of such
foreign banking institution or foreign trust company under its agreement with
the Custodian.
7. REPORTS BY THE CUSTODIAN. The Custodian will supply to the Fund from
time to time, as reasonably requested by the Fund, statements in respect of the
securities and other assets of the Fund held by foreign subcustodians, 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 such custodial account maintained by a foreign banking
institution or foreign trust company 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 ▇▇▇▇▇▇▇ ▇, ▇, ▇▇▇ ▇▇, ▇, ▇ and E of the
Custodian Agreement shall apply, MUTATIS MUTANDIS to the foreign
securities, cash and cash equivalents of the Fund held outside
the United States by foreign subcustodians.
(b) Notwithstanding any provision of the Custodian Agreement to the
contract, 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, with limitation, delivering
securities to the purchaser thereof or to a dealer thereof (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 subcustodian
may be maintained in the name of such entity's nominee to the
same extent as set forth in Section 3B of the Custodian
Agreement.
3
9. LIABILITY OF FOREIGN SUBCUSTODIANS. Each agreement pursuant to which
the Custodian employs a foreign banking institution or foreign trust company as
a foreign subcustodian shall require the subcustodian to exercise reasonable
care in the performance of its duties and to indemnify , and hold harmless, the
Custodian and the 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 or foreign trust company 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 or foreign trust company to the same
except as set forth with respect to subcustodians generally in the Custodian
Agreement and, regardless of whether assets are maintained in the custody of a
foreign banking institution, a foreign trust company, a foreign securities
depository, a foreign clearing agency 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 on any loss where the
subcustodian 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 the like under circumstances where the
Custodian and State Street London Ltd. have exercised reasonable
care.
11. REIMBURSEMENT FOR ADVANCES. If a portfolio of 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 amendment to the Custodian Agreement, except such as may
arise from its or its nominee's own negligent action, negligent failure to act
or willful misconduct, any property at any time held for the account of such
portfolio shall be security
4
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's assets
to the extent necessary to obtain reimbursement but in no event to exceed the
assets of such portfolio of the Fund.
12. MONITORING RESPONSIBILITIES. The Custodian shall furnish annually to
the Fund, during the month of June, information concerning the foreign
subcustodians 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 Agreement. 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
subcustodian or any material loss of the assets of the Fund or in the case of
any foreign subcustodian not the subject of an exemptive order from the
Securities and Exchange commission is notified by such foreign subcustodian 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
Agreement, the provisions hereof shall not apply where the
custody of 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 1940 Act meeting the qualification set forth in
Section 26(a) of said Act. The appointment of any such branch as
a subcustodian shall be governed by paragraph 8B of the Custodian
Agreement.
(b) Cash held for a portfolio of the Fund in the United Kingdom shall
be maintained in an interest bearing account established for such
portfolio 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 AGREEMENT. Except as specifically
superseded or modified herein, the terms and provisions of the Custodian
Agreement shall continue to apply with full force and effect.
15. UNITHOLDER LIABILITY. This amendment to the Custodian Agreement is
executed by or on behalf of the Fund and the obligations hereunder are not
binding upon any of the Trustees, officers or unitholders of the Fund
individually but are binding only upon the Fund and its assets and property.
The Fund's Trust
5
Agreement is on file with the Secretary of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative as of the
18th day of September, 1989.
TRUST FOR CREDIT UNIONS
ATTEST:
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: ▇.▇. ▇▇▇▇▇▇▇, ▇▇.
---------------------- -------------------------
as its Secretary as its President
---------------- ----------------
STATE STREET BANK AND TRUST COMPANY
ATTEST:
By: ▇. ▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------- --------------------------
as its Assistant Secretary as its Vice President
-------------------------- ---------------------
6
SCHEDULE A
The following foreign banking institutions, foreign trust companies, foreign
securities depositories and foreign clearing agencies have been approved by the
Trustees of Trust for Credit Unions for use as subcustodians for such fund's
securities and other assets.
State Street London Limited
7