[FOR DOMESTIC CUSTODY AGREEMENTS HAVING REVISED UCC ARTICLE 8 DEFINITIONS]
GLOBAL CUSTODY RIDER
TO
DOMESTIC CUSTODY AGREEMENT
This Rider is entered into by and between The Chase Manhattan Bank
("Custodian") and State Farm Associates' Funds Trust on behalf of its
separate investment portfolios listed in Schedule A ("Company") to provide
Global Custody Services subject to the terms of the Custody Agreement dated
as of March 20th, 2001, and the terms herein. If there is any conflict between
the terms in the Custody Agreement and the terms in this Rider with regard to
the provision by Custodian of Global Custody Services to Company, the terms
of this Rider shall govern. The terms of this Rider shall be effective as of
the date Custodian commences to provide Global Custody Services to Company.
Capitalized terms used herein and not defined herein shall have the meaning
as set forth in the Custody Agreement.
1. MAINTENANCE OF FINANCIAL ASSETS AND CASH OUTSIDE THE UNITED STATES.
Global Custody Services shall be provided for those Financial Assets
that are to be held outside the United States and unless Company's
instructions specifically require another location acceptable to Custodian:
(a) Financial Assets shall be held in the country or other
jurisdiction in which the principal trading market for such Financial Assets
are located, where such Financial Assets are to be presented for payment or
where such Financial Assets are acquired; and
(b) cash shall be credited to an account in a country or other
jurisdiction in which such cash may be legally deposited or is the legal
currency for the payment of public or private debts.
Cash may be held pursuant to instructions in either interest or
non-interest bearing accounts as may be available for the particular
currency. To the extent Custodian can comply with Company's instructions to
it, Custodian is authorized to maintain cash balances on deposit for Company
with Custodian or one of its Affiliates at such reasonable rates of interest
as may from time to time be paid on such accounts, or in non-interest bearing
accounts as Company may direct, if acceptable to Custodian. For purposes
hereof, the term "Affiliate" shall mean an entity controlling, controlled by,
or under common control with, Custodian.
If Company wishes to have any of the Financial Assets held in the
custody of a Securities Intermediary other than the established Subcustodians
as defined in Section 2 hereof (or their securities depositories), such
arrangement must be authorized by a written agreement, signed by Custodian
and Company.
2. SUBCUSTODIANS AND DEPOSITORIES.
Custodian may act under this Rider through the subcustodians listed
in Schedule B hereto with which Chase entered into subcustodial agreements
("Subcustodians"). At Company's request, Custodian may, but need not, add to
Schedule B an Eligible Foreign Custodian (hereinafter defined) that is either
a bank or a non-Compulsory Depository where Custodian has not acted as
Foreign Country Manager (hereinafter defined) with respect to the selection
thereof. Custodian shall notify Company in writing in the event that
Custodian agrees to add any such entity. Company authorizes Custodian to hold
Financial Assets recorded to the Custody Account in accounts which Custodian
has established with one or more of its branches or Subcustodians. Custodian
and Subcustodians are authorized to hold any of the Financial Assets in their
accounts with any securities depository in which Custodian or Subcustodians
participate, subject in the case of a Compulsory Depository to the provisions
set forth in section 9(e) hereof.
Custodian may add new, replace or remove Subcustodians. Company
shall be given reasonable notice by Custodian of any amendment to Schedule B.
Upon Company's request, Custodian shall identify the name, address and
principal place of business of any Subcustodian of Company's Financial Assets
and the name and address of the governmental agency or other regulatory
authority that supervises or regulates such Subcustodian.
To be a Subcustodian of Financial Assets maintained outside the
United States the Subcustodian chosen must be either a branch of a U.S. Bank
or an Eligible Foreign Custodian, which are further defined as follows:
(i) "U.S. Bank" shall mean a qualified U.S. bank as defined in
Rule 17f-5(a)(7) under the Investment Company Act of 1940, as amended (the
" 1940 Act");
(ii) "Eligible Foreign Custodian" shall mean (1) a banking
institution or trust company, incorporated or organized under the laws of a
country other than the United States, that is regulated as such by that
country's government or an agency thereof, (2) a majority owned direct or
indirect subsidiary of a U.S. Bank or bank holding company that is
incorporated or organized under the laws of a country other than the United
States, (3) a foreign securities depository or clearing agency, incorporated
or organized under the laws of a country other than the United States that
acts as a system for handling of securities or equivalent book-entries in
that country and that is regulated by a foreign financial regulatory
authority as defined under Section 2(a)(5) of the 1940 Act, (4) a securities
depository or clearing agency organized under the laws of a country other
than the United States, when acting as a transnational system for the central
handling of Financial Assets or equivalent book-entries, and (5) any other
entity that H shall have been so qualified by exemptive order, rule or other
appropriate action of the Securities and Exchange Commission (the "SEC").
3. USE OF SUBCUSTODIAN.
(a) Custodian shall identify the Financial Assets on its books
as belonging to Company.
(b) A Subcustodian shall hold Company's Financial Assets
together with Financial Assets belonging to other of Custodian's customers in
accounts identified on such Subcustodian's books as for the exclusive benefit
of Custodian's customers.
(c) Any Financial Assets in the accounts held by a Subcustodian
shall be subject only to the instruction of Custodian. Any Financial Assets
held in a securities depository for the account of a Subcustodian shall be
subject only to the directions of such Subcustodian.
(d) Any agreement Custodian enters into with a Subcustodian for
holding its customers' assets shall provide that such assets shall not be
subject to any right, charge, security interest, lien or claim of any kind in
favor of such Subcustodian except for safe custody or administration, and
that the beneficial ownership of such assets shall be freely transferable
without the payment of money or value other than for safe custody or
administration or, in the case of cash deposit, liens or rights in favor of
creditors of the Subcustodian arising under bankruptcy, insolvency or similar
laws. Where Financial Assets are deposited by a Subcustodian with a
securities depository, Custodian shall cause the Subcustodian to identify on
its books as belonging to Custodian, as agent, the Financial Assets shown on
the Subcustodian's account on the books of such securities depository. The
foregoing shall not apply to the extent of any special agreement or
arrangement made by Company with any particular Subcustodian.
4. GLOBAL FINANCIAL ASSETS ACCOUNT TRANSACTIONS.
(a) Financial Assets shall be transferred, exchanged or
delivered by Custodian or Subcustodian upon receipt by Custodian of
instructions from Company which include all information required by
Custodian. Settlement and payment for Financial Assets received for, and
delivery of Financial Assets out of, the Custody Account may be made in
accordance with the customary or established Securities trading or Securities
processing practices and procedures in the jurisdiction or market in which
the transaction occurs, including, without limitation, delivery of Securities
to a purchaser, dealer or their agents against a receipt with the expectation
of receiving later payment and free delivery. Delivery of Financial Assets
out of the Custody Account may be made in any manner specifically required by
Company's instructions acceptable to Custodian.
All collections of funds or other property paid or
distributed in respect of Financial Assets in the Custody Account shall be
made at Company's risk. Custodian shall have no liability for any loss
occasioned by delay in the actual receipt of notice by Custodian or by
Subcustodians of any payment, redemption or other transaction regarding
Financial Assets in the Custody Account in respect of which Custodian has
agreed to take any action under the Agreement.
5. CORPORATE ACTIONS; PROXIES; TAX RECLAIMS.
(a) CORPORATE ACTIONS. Whenever Custodian receives information
concerning the Financial Assets which requires discretionary action by the
beneficial owner of the Financial Assets (other than a proxy), such as
subscription rights, bonus issues, stock repurchase plans and rights
offerings, or legal notices or other material intended to be transmitted to
Securities holders ("Corporate Actions"), Custodian shall give Company notice
of such Corporate Actions to the extent that its central corporate actions
department has actual knowledge of a Corporate Action in time to notify its
customers. Custodian shall notify Company of any Corporate Action regarding
Financial Assets held for the Company, that Custodian shall have received
after its intended expiration.
When a rights entitlement or a fractional interest resulting from a
rights issue, stock dividend, stock split or similar Corporate Action is
received which bears an expiration date, Custodian shall
endeavor to obtain instructions from Company or an Authorized Officer, but if
instructions are not received in time for Custodian to take timely action, or
actual notice of such Corporate Action was received too late to seek
instructions, Custodian is authorized to sell such rights entitlement or
fractional interest and to credit the Cash Account with the proceeds or take
any other action Custodian deems, in good faith, to be appropriate.
(b) PROXY VOTING. Custodian shall provide proxy voting
services, if elected by Company, in accordance with the terms of the Proxy
Voting Services Rider hereto. Proxy voting services may be provided by
Custodian or, in whole or in part, by one or more third parties appointed by
Custodian (which may be its Affiliates); provided that Custodian shall be
liable for the performance of any such third party to the same extent as
Custodian would have been if it performed such services itself.
(c) Tax Reclaims.
(i) Subject to the provisions hereof, Custodian shall apply for
a reduction of withholding tax and any refund of any tax paid or tax credits
which apply in each applicable market in respect of income payments on
Financial Assets for Company's benefit which Custodian believes may be
available to Company.
(ii) The provision of tax reclaim services by Custodian is
conditional upon it receiving from Company or, to the extent the Financial
Assets are beneficially owned by others, from each beneficial owner, A) a
declaration of the beneficial owner's identity and place of residence and (B)
certain other documentation (PRO FORMA copies of which are available from
Custodian). Company acknowledges that, if Custodian does not receive such
declarations, documentation and information Custodian will be unable to
provide tax reclaim services.
(iii) Custodian and its agents shall not be liable to Company
or any third party for any taxes, fines or penalties payable by Custodian or
its agents or by Company, and shall be indemnified accordingly, whether these
result from the inaccurate completion of documents by Company or any third
party, or as a result of the provision to Custodian or any third party of
inaccurate or misleading information or the withholding of material
information by Company or any other third party, or as a result of any delay
of any revenue authority or any other matter beyond Custodian's or its
agents' control.
(iv) Custodian shall perform tax reclaim services only with
respect to taxation levied by the revenue authorities of the countries
notified to Company from time to time and Custodian may, by notification in
writing, supplement or amend the markets in which the tax reclaim services
are offered. Other than as expressly provided in this sub-clause, Custodian
shall have no responsibility with regard to Company's tax position or status
in any jurisdiction.
(v) Company confirms that Custodian is authorized to disclose
any information requested by any revenue authority or any governmental body
in relation to Company or the Financial Assets and/or cash held for Company.
(vi) Tax reclaim services may be provided by Custodian or, in
whole or in part, by one or more third parties appointed by Custodian (which
may be Affiliates); provided that Custodian shall be liable
for the performance of any such third party to the same extent as Custodian
would have been if it performed such services.
(d) TAX OBLIGATIONS AND INDEMNIFICATION.
(i) Company confirms that Custodian is authorized to deduct
from any cash received or credited to the Cash Account any taxes or levies
required by any revenue or governmental authority for whatever reason in
respect of the Custody Account.
(ii) Company agrees that if Custodian does not receive
appropriate declarations, documentation and information that additional
United Kingdom taxation shall be deducted from all income received in respect
of the Financial Assets issued outside the United Kingdom and that any
applicable United States withholding tax shall be deducted from income
received from the Financial Assets. Company shall provide to Custodian such
documentation and information as Custodian may require in connection with
taxation, and warrant that, when given, this information shall be true and
correct in every respect, not misleading in any way, and contain all material
information. Company undertakes to notify Custodian immediately if any such
information requires updating or amendment.
(iii) Company shall be responsible for the payment of all taxes
relating to the Financial Assets in the Custody Account, and Company agrees
to pay, indemnify and hold Custodian and its agents harmless from and against
any and all liabilities, penalties, interest or additions to tax with respect
to or resulting from, any delay in, or failure by, Custodian or its agents
(1) to pay, withhold or report any U.S. federal, state or local taxes or
foreign taxes imposed on, or (2) to report interest, dividend or other income
paid or credited to the Cash Account, whether such failure or delay by
Custodian or its agents to pay, withhold or report tax or income is the
result of W Company's failure to comply with the terms of this paragraph, or
(y) Custodian or its agents own acts or omissions; provided however, Company
shall not be liable to Custodian and its agents for any penalty or additions
to tax due as a result of the failure of Custodian or its agents to pay or
withhold tax or to report interest, dividend or other income paid or credited
to the Cash Account solely as a result of negligent acts or omissions of
Custodian or its agents.
6. NOMINEES.
Financial Assets which are ordinarily held in registered form may be
registered in a nominee name of Custodian, Subcustodians or securities
depositories, as the case may be. Custodian may without notice to Company
cause any such Financial Assets to cease to be registered in the name of any
such nominee and to be registered in Company's name. Company agrees to hold
Custodian, Subcustodians, securities depositories and its and their
respective nominees harmless from any liability arising directly or
indirectly from its or their status as a mere record holder of Financial
Assets in the Custody Account.
7. STANDARD OF CARE.
Custodian shall use reasonable care with respect to its obligations
and the safekeeping of Company's Financial Assets hereunder. Custodian shall
be liable to Company for any loss which shall occur as the result of the
failure of a Subcustodian (except that Custodian shall have no liability for
the performance of a Compulsory Depository as defined in section 9(e) hereof)
to exercise
reasonable care with respect to the safekeeping of Financial Assets where
such loss results directly from the failure of a Subcustodian to use
reasonable care in the provision of custodial services by it in accordance
with the standards prevailing in its local market or from the willful default
of such Subcustodian in the provision of custodial services by it. Any
liability of the Custodian hereunder shall be limited to the extent set forth
in section 7.16 of the Custody Agreement. Custodian shall not be responsible
for the insolvency of any Subcustodian which is not a branch or its Affiliate.
Custodian shall be entitled to rely, and may act, upon the advice of
counsel (who may be counsel for Company) on all matters and shall be without
liability for any action reasonably taken or omitted pursuant to such advice.
Without limiting anything else contained in this section, Custodian
shall not be liable for any loss which results from: 1) the general risk of
investing, or 2) investing or holding Financial Assets in a particular
country including, but not limited to, nationalization, expropriation or
other governmental actions; regulation of the banking or securities industry;
currency restrictions, devaluations or fluctuations; and market conditions
which prevent the orderly execution of securities transactions or affect the
value of Financial Assets.
8. FEES AND EXPENSES.
Company agrees to pay Custodian for Global Custody Services
hereunder the fees set forth in Schedule C hereto or such other amounts as
may be agreed upon in writing, together with its reasonable out-of-pocket or
incidental expenses, including, but not limited to, legal fees.
9. MISCELLANEOUS.
(a) FOREIGN EXCHANGE TRANSACTIONS. To facilitate the
administration of Company's trading and investment activity, when instructed
by specific or standing instruction, Custodian is authorized to enter into
spot or forward foreign exchange contracts for Company's account with itself
(or any of its Affiliates). Custodian may establish rules or limitations
concerning any foreign exchange facility made available. In all cases where
Custodian or its Affiliates have entered into a separate master foreign
exchange contract with Company that covers a foreign exchange transaction for
the Custody Account, the terms and conditions of that foreign exchange
contract and, to the extent not inconsistent, the Agreement shall apply to
such transaction.
(b) CERTIFICATION OF RESIDENCY, ETC. Company certifies that it
is a resident of the United States and agrees to notify Custodian of any
changes in residency. Custodian may rely upon this certification or the
certification of such other facts as may be required to administer
Custodian's obligations under this Rider and the Agreement. Company shall
indemnify Custodian and its agents against all losses, liability, damages,
claims or demands arising directly or indirectly from any such certifications.
(c) ACCESS TO RECORDS. Custodian shall allow Company's
independent public accountant reasonable access to records relating to the
Custody Account as is required in connection with their examination of books
and records pertaining to Company's affairs. Subject to restrictions under
applicable law, Custodian shall also obtain an undertaking to permit
Company's independent public accountants reasonable access to the records of
any Subcustodian which has physical possession of
any Financial Assets as may be required in connection with the examination of
Company's books and records.
(d) COMPANY'S REPRESENTATION. Company represents that the
Financial Assets being placed in Custodian's custody are subject to the 1940
Act, as the same may be amended from time to time.
(e) COMPLIANCE WITH SEC RULE 17F-5.
(1) Company's board of directors (or equivalent body)
(hereinafter "Board") hereby delegates to Custodian, and Custodian hereby
accepts the delegation to Custodian, of the obligation to perform as its
"Foreign Custody Manager" (as that term is defined in SEC 'Rule 17f-5(a)(2)),
both for the purpose of selecting Eligible Foreign Custodians (as that term
is defined in SEC Rule 17f-5(a)(1), and as the same may be amended from time
to time, or that have otherwise been made exempt pursuant to an SEC exemptive
order) to hold Financial Assets and of evaluating the contractual
arrangements with such Eligible Foreign Custodians (as set forth in SEC Rule
17f-5(c)(2)); provided that, the term Eligible Foreign Custodian shall not
include any "Compulsory Depository". A Compulsory Depository shall mean a
securities depository or clearing agency the use of which is compulsory
because: W its use is required by law or regulation, (ii) securities cannot
be withdrawn from the depository, or (iii) maintaining securities outside the
depository is not consistent with prevailing custodial practices in the
country which the depository serves. Compulsory Depositories used by
Custodian as of the date hereof are set forth in Appendix 1-A hereto, and as
the same may be amended on notice to Company from time to time.
(2) In connection with the foregoing, Custodian shall:
(i) provide written reports notifying our Board of the
placement of Financial Assets with particular Eligible Foreign Custodians and
of any material change in the arrangements with such Eligible Foreign
Custodians, with such reports to be provided to our Board at such times as
the Board deems reasonable and appropriate based on the circumstances of our
foreign custody arrangements (and until further notice from us such reports
shall be provided not less than quarterly with respect to the placement of
Financial Assets with particular Eligible Foreign Custodians and with
reasonable promptness upon the occurrence of any material change in the
arrangements with such Eligible Foreign Custodians);
(ii) exercise such reasonable care, prudence and diligence in
performing as Company's Foreign Custody Manager as a person having
responsibility for the safekeeping of Financial Assets would exercise;
(iii) in selecting an Eligible Foreign Custodian, first have
determined that Financial Assets placed and maintained in the safekeeping of
such Eligible Foreign Custodian shall be subject to reasonable care, based on
the standards applicable to custodians in the relevant market, after having
considered all factors relevant to the safekeeping of such Financial Assets,
including, without limitation, those factors set forth in SEC Rule
17f-5(c)(1)(i)-(iv);
(iv) determine that the written contract with the Eligible
Foreign Custodian (or, in the case of an Eligible Foreign Custodian that is a
securities depository or clearing agency, such contract, the
rules or established practices or procedures of the depository, or any
combination of the foregoing) requires that the Eligible Foreign Custodian
will provide reasonable care for Financial Assets based on the standards
applicable to custodians in the relevant market; and
(v) have established a system to monitor the continued
appropriateness of maintaining Financial Assets with particular Eligible
Foreign Custodians and of the governing contractual arrangements; it being
understood, however, that in the event that Custodian shall have determined
that the existing Eligible Foreign Custodian in a given country would no
longer afford Financial Assets reasonable care and that no other Eligible
Foreign Custodian in that country would afford reasonable care, Custodian
shall promptly so advise Company and shall then act in accordance with
Company's instructions with respect to the disposition of the affected
Financial Assets.
Subject to paragraphs W(2)(O-M above, Custodian is hereby authorized to place
and maintain Financial Assets on Company's behalf with Eligible Foreign
Custodians pursuant to a written contract deemed appropriate by Custodian.
(3) Except as expressly provided herein, Company shall be
solely responsible to assure that the maintenance of Financial Assets
hereunder complies with the rules, regulations, interpretations and exemptive
orders promulgated by or under the authority of the SEC.
(4) Custodian represents to Company that Custodian is a U.S.
Bank as defined in Rule 17f-5(a)(7). Company represents to Custodian that:
(i) the Financial Assets being placed and maintained in Custodian's custody
are subject to the 1940 Act, as the same may be amended from time to time;
(ii) Company's Board: (A) has determined that it is reasonable to rely on
Custodian to perform as its Foreign Custody Manager (B) or Company's
investment adviser shall have determined that Company may maintain Financial
Assets in each country in which Financial Assets shall be held hereunder and
determined to accept the risks arising therefrom (including, but not limited
to, a country's financial infrastructure (and including any Compulsory
Depository operating in such country), prevailing custody and settlement
practices, laws applicable to the safekeeping and recovery of Financial
Assets held in custody, and the likelihood of nationalization, currency
controls and the like) (collectively ("Country Risk")). Nothing contained
herein shall require Custodian to make any selection or to engage in any
monitoring on Company's behalf that would entail consideration of Country
Risk.
(5) Custodian shall provide to Company such information
relating to Country Risk as is specified in Appendix 1-B hereto. Company
hereby acknowledges that: (i) such information is solely designed to inform
it of market conditions and procedures, but is not intended to influence
Company's investment decisions; and (ii) Custodian has gathered the
information from sources it considers reliable, but that Custodian shall have
no responsibility for inaccuracies or incomplete information.
STATE FARM ASSOCIATES' FUNDS TRUST
By: /s/ Xxxxxx X. Xxxx, Xx.
-----------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: President
Date: March 20, 2001
Accepted and agreed to:
THE CHASE MANHATTAN BANK
By: /s/ Xxxxx X. Xxxxxx
-------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
SCHEDULE A
Investment Portfolios Included in this Agreement
State Farm Growth Fund
State Farm Balanced Fund
