Exhibit (7)(b)
CUSTODIAN AGREEMENT AMENDMENT
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THIS AMENDMENT made as of this 18th day of March, 1998, to the Custodian
Agreement, dated as of June 1, 1993, between 1784 Funds, a Massachusetts
business trust now known as Boston 1784 Funds, and The First National Bank of
Boston, a national banking association now known as BankBoston, National
Association.
IN CONSIDERATION of the mutual promises contained herein and for other good
and valuable consideration, the parties hereto hereby agree to amend Section
4(B) of the Custodian Agreement to provide as follows:
B. The Custodian may, at its sole discretion, advance cash or Securities of
the Custodian as a temporary measure for extraordinary or emergency purposes,
for payment or delivery on behalf of a series of the Fund (the "Series") to a
third party (an "Advance"), and in the event of an Advance, property held by the
Custodian on behalf of the Series with a fair market value equal to 130% of the
amount of such Advance (the "Collateral") shall serve as security for the
Series' obligation to repay such Advance until such time as such Advance is
repaid. In the case where an Advance is extended for the purchase of Securities
which constitute "margin stock" under Regulation U of the Board of Governors of
the Federal Reserve System and where the Custodian reasonably determines that
Regulation U applies, such additional Securities of the Series, as shall be
necessary for the Custodian, in the Custodian's reasonable determination, to
be in compliance with such Regulation U also shall constitute security for the
Series' obligation to repay such Advance and shall be deemed "Collateral"
hereunder. Notwithstanding the foregoing, in no event shall the value of the
Collateral for all Advances to a Series exceed 10% of the current value of the
total assets of such Series at the time of the incurrence of the last such
Advance. The Fund on behalf of the Series hereby grants the Custodian a security
interest in the Collateral to secure such Advance to the Series and agrees to
repay such Advance promptly without demand from the Custodian (and in any event,
as soon as reasonably practicable following any demand by the Custodian),
unless otherwise agreed by both parties. If repayment of any Advance is not
made in accordance with the terms hereof, the Custodian shall have the rights
and remedies of a secured party under the Massachusetts Uniform Commercial
Code (the "Code") including the right to sell any of the Collateral on any
securities market, or at public or private sale in a commercially reasonable
manner, which the Fund agrees may be without notice to the Fund or prior
tender, demand or call upon the Fund. Subject to the Code and to the
Investment Company Act of 1940, the Custodian may purchase all or any part of
the Collateral free from any redemption right, but the Fund on behalf of the
Series will remain liable for any deficiency, including reasonable brokerage
fee commissions. The parties acknowledge and agree that the Custodian is the
Fund's "securities intermediary" as that term is defined in Section 8-102(a)(14)
of the Code and that all securities constituting any part of the Collateral
shall be in the "possession" and under the "control" of the Custodian as that
term is defined in Section 8-106(e) of the Code.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to the
Custodian Agreement to be executed by their respect officers thereunto duly
authorized as of the date first written above.
BOSTON 1784 FUNDS
By: /s/Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
BANKBOSTON, NATIONAL
ASSOCIATION
By: /s/Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Senior Manager
