EXHIBIT 3

                                                                   March 1, 2006

Investors Bank & Trust Company
Financial Products Services
200 Clarendon Street
Boston, Massachusetts  02116

Re:   Amendment to the Custodian Agreement (the "Agreement"), dated as of August
      1, 1991, by and among GMO Trust, Grantham, Mayo, Van Otterloo & Co. LLC
      ("GMO") and Investors Bank & Trust Co. ("IBT"), as amended (the "Custodian
      Agreement") and the Amended and Restated Delegation Agreement, dated as of
      June 29, 2001, by and between IBT and GMO Trust, on behalf of certain of
      its series of the Trust, as amended (the "Delegation Agreement")

Ladies and Gentlemen:

      GMO Trust hereby notifies you that it has established one additional
series of shares, namely, GMO Short-Duration Collateral Share Fund (the "New
Fund"). The Trust (as defined in each of the Custodian Agreement and the
Delegation Agreement) desires that you serve as (i) custodian of the assets of
the New Fund under the terms of the Custodian Agreement and (ii) delegate with
respect to the assets of the New Fund under the terms of the Delegation
Agreement.

      If you agree to so serve as custodian and delegate for the New Fund,
kindly sign and return to the Trust the enclosed counterpart hereof, whereupon
the New Fund shall be deemed a "Fund" under each of the Custodian Agreement and
Delegation Agreement. This letter agreement shall constitute an amendment to the
Custodian Agreement and the Delegation Agreement and, as such, a binding
agreement among the Trust, GMO (only in the case of the Custodian Agreement) and
you in accordance with its terms.

                                          Sincerely,

                                          GMO TRUST

                                          By:  ________________________
                                          Name:
                                          Title:



Investors Bank & Trust Company                -2                   March 1, 2006

                                          GRANTHAM, MAYO, VAN OTTERLOO & CO. LLC

                                          By:  ________________________
                                          Name:
                                          Title:

                                          By:  ________________________
                                          Name:
                                          Title:

The foregoing is hereby
accepted and agreed.

INVESTORS BANK & TRUST COMPANY

By:  _______________________
       Name:
       Title: