JPMORGAN
GLOBAL CORPORATE CUSTODY AGREEMENT
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AGREEMENT dated as of Nov 1, 1990 between XXXXXX GUARANTY TRUST COMPANY of
New York, a New York banking corporation (the "Bank"), and STATE FARM BALANCED
FUND, INC. (the "Client").
WHEREAS, the Client, which is a Maryland Corporation and an investment
company registered as such under the Investment Company Act of 1940, desires to
arrange for the custody of certain of its assets by the Bank and by certain
foreign banks, selected by the Bank on behalf of the Client with the Client's
approval to act as the Client's foreign custodians;
WHEREAS, the Client specifically approves the designation by the Bank of its
New York Office as the office through which the Bank will perform many of the
services and fulfill many of its obligations under this Agreement;
NOW THEREFORE, in consideration of the mutual agreement made herein, the
Bank and the Client agree as follows:
1. The Bank agrees to establish and maintain (a) one or more separate
custody accounts (singly a "Custody Account" and collectively the "Custody
Accounts") for any and all stocks, bonds and other securities (the "Securities")
from time to time received for the account of the Client by the Bank, a Domestic
Subcustodian, or a Foreign Custodian and (b) one or more separate deposit
accounts (singly a "Deposit Account" and collectively the "Deposit Accounts")
for any and all cash (the "Cash") in any currency received for the account of
the Client by the Bank or a Foreign Custodian. The term "Domestic Subcustodian"
means a depository located in the United States including, but not limited to,
the Depository Trust Company, the Federal Reserve Bank of New York and the
Participants Trust Company, the use of which has been expressly authorized by
the Client. The term "Foreign Custodian" means a foreign bank formally
appointed by the Bank, in its capacity as agent of the Client, to act as a
custodian of the Client pursuant to a contract approved by the Client in any of
the countries or jurisdications listed on Appendix A hereto, as amended from
time to time.
2. Securities and Cash are permitted to be held by
a) the Bank at any of its offices wherever located;
b) Domestic Subcustodians;
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c) Foreign Custodians;
d) foreign securities depositories or clearing agencies (singly a "Foreign
Securities System" and collectively the "Foreign Securities Systems") selected
by the Bank or a Foreign Custodian with the approval of the Client from time to
time.
Such Foreign Securities Systems shall be deemed to be subcustodians of the
Bank or the Foreign Custodian, as the case may be, and Securities and Cash held
by a Foreign Securities System shall be considered for all purposes of this
Agreement as being held directly by the Bank or by the Foreign Custodian for
which the Foreign Securities System is acting, as the case may be.
3. (a) The records maintained by the Bank of the Custody Accounts and the
Deposit Accounts will reflect all Securities and Cash maintained in accordance
with Section 1 hereof.
(b) The Bank will require each Foreign Custodian to identify Securities and
Cash held by the latter, or by a Foreign Securities System acting as the
latter's subcustodian, as being held for the account of the Bank as agent for
the Bank's clients.
(c) The Bank will require each Domestic Subcustodian holding Securities and
each Foreign Securities System acting as the Bank's subcustodian, and will cause
each Foreign Custodian to require each Foreign Securities System acting as the
latter's subcustodian, to identify the securities held by them as being held for
the account of the Bank for its clients or for the account of the Foreign
Custodian for its clients, as the case may be.
(d) The Bank shall, and shall require each Foreign Custodian, to physically
segregate any Securities which are physically held by it; in all other respects
the Securities may be commingled with other securities no matter by whom owned,
except for securities owned by the Bank as principal, subject to the record-
keeping requirements of subsections (b) and (c) above. Securities may be held
in certificated and uncertificated form.
(e) Any Securities or Cash held by a Domestic Subcustodian or a Foreign
Custodian will be subject only to the instructions of the Bank acting in its
capacity as agent of the Client and any Securities held by a Foreign Securities
System will be subject only to the instructions of the Bank or such Foreign
Custodian.
(f) The Bank will authorize or permit the holding of Securities and Cash by
a Domestic Subcustodian, a Foreign Custodian or Foreign Securities System only
as long as (i) the Securities are not
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subject to any right, charge, security interest, lien or claim of any kind in
favor of such Domestic Subcustodian, Foreign Custodian or Foreign Securities
System or the creditors of any of them, including a receiver or trustee in
bankruptcy, except for a claim of payment for the safe custody or administration
of the Securities or, in the case of a Foreign Custodian, for funds advanced on
behalf of the Client by such Foreign Custodian and (ii) beneficial ownership of
the Securities is freely transferable without the payment of money or value
other than for safe custody or administration.
(g) The Bank will require each Foreign Custodian to use reasonable care in
the performance of its duties, exercise the same degree of care with respect to
the Securities and Cash as it would with respect to its own Securities and
property and that of its clients and indemnify the Bank and the Client against,
and hold the Bank and the Client harmless from, any loss or liability
(including, but not limited to, attorney's fees and expenses) incurred by the
Bank or the Client with respect to any Securities or Cash or the Custody
Accounts or the Deposit Accounts by reason of the negligence (whether through
action or inaction), fraud or willful misconduct of such Foreign Custodian or
any Foreign Securities System acting as the subcustodian of such Foreign
Custodian.
(h) The Bank will require each Foreign Custodian to maintain insurance
coverage with respect to the Securities covering such risks and in such amounts
as it maintains with respect to securities which it holds for its own account
and for the account of other clients and to provide the Bank with such
information as the Bank may reasonably require regarding such insurance
coverage.
(i) The Bank will require each Foreign Custodian or Foreign Securities
System to make periodic reports with respect to the Securities and Cash
including, but not limited to, notification of any transaction affecting the
Securities or Cash.
(j) The Bank will allow independent public accountants of the Client
reasonable access to the records of the Bank relating to the Securities and Cash
as is required by those accountants in connection with their examination of the
books and records pertaining to the affairs of the Client and will require each
Foreign Custodian to grant such access to the independent public accountants of
the Client to the extent consistent with applicable law and regulations. Upon
request, the Bank will provide the Client with any reports obtained by the Bank
on a Domestic Subcustodian's accounting system, internal accounting controls and
procedures for safekeeping securities.
4. The Bank shall make, or cause a Foreign Custodian to make, payments of
Cash only:
(a)(1) in the case of Securities to be delivered and paid for within
the United States, upon the purchase of such Securities for the Client and
against the delivery of such Securities to the Bank,
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or the crediting of such Securities to the account of the Bank or its Domestic
Subcustodian for the account of the Client, and
(2) in the case of Securities to be delivered and paid for outside of
the United States, upon the purchase of such Securities for the Client and
against the delivery of such Securities to the Bank, or the crediting of such
Securities to the account of the Bank or such Foreign Custodian for the account
of the Client, except that such transaction may be effected in accordance with
customary established securities trading practices or securities processing
practices and procedures in the jurisdiction or market in which the transaction
occurs;
provided, however, that such payment in either (1) or (2) is made in the amount
specified by Authorized Instructions;
(b) for any payments to be made in connection with the sale,
conversion, exchange or surrender of any Securities;
(c) for purchase or redemption of shares of the Client upon delivery
thereof;
(d) for payment of interest, dividends, taxes, management or
supervisory fees, and operating expenses;
(e) for other purposes of the Client, but only upon receipt of, in
addition to Authorized Instructions, a certified copy of a resolution of the
Board of Directors or of the Executive Committee of the Client signed by an
officer of the Client and certified by its Secretary or an Assistant Secretary,
specifying the amount of such payment, setting forth the purpose for which such
payment is to be made, declaring such purpose to be a proper purpose, and naming
the person or persons to whom such payment is to be made; and
(f) upon termination of this Agreement as set forth in section 16 of
this Agreement.
5. Securities will be transferred, exchanged, or delivered by the Bank or a
Foreign Custodian only:
(a) upon the sale of Securities and against receipt by the Bank or Foreign
Custodian of payment therefor in accordance with Authorized Instructions;
provided that the Bank or such Foreign Custodian may accept payment in such form
as shall be satisfactory to it, and may deliver such Securities and arrange for
payment subsequent to delivery therefor in accordance with customary established
securities trading practices or securities processing practices and procedures
in the jurisdiction or market in
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which the transaction occurs (it being agreed that the Client bears the risk
that the recipient of such Securities may fail to make payment, to return such
Securities, or to hold such Securities or the proceeds of their sale in trust
for the Bank or such Foreign Custodian);
(b) in exchange for or upon conversion into other Securities or Cash
pursuant to a plan of merger, consolidation, reorganization, recapitalization or
readjustment;
(c) upon the conversion of Securities pursuant to their terms into other
Securities;
(d) upon the exercise of subscription, purchase or other similar rights
represented by Securities;
(e) for the purpose of redeeming in kind shares of the Client in accordance
with Authorized Instructions;
(f) for other purposes of the Client, but only upon receipt of, in addition
to Authorized Instructions, a certified copy of a resolution of the Board of
Directors or of the Executive Committee of the Client signed by an officer of
the Client and certified by its Secretary or an Assistant Secretary, specifying
the Securities to be delivered, setting forth the purpose for which such
delivery is to be made, declaring such purpose to be a proper purpose, and
naming the person or persons to whom such delivery is to be made; and
(g) upon termination of this Agreement as set forth in Section 16 of this
Agreement.
6. Until the Bank receives Authorized Instructions to the contrary, the
Bank will and will instruct each Foreign Custodian to:
(a) deposit all Cash received by the Bank in a Deposit Account, all
securities received by the Bank in a Custody Account, all Cash received by such
Foreign Custodian in a deposit account maintained in the name of the Bank with
such Foreign Custodian for credit to a Deposit Account and all Securities
received by such Foreign Custodian in a custody account maintained in the name
of the Bank for its customers with such Foreign Custodian for credit to a
Custody Account and cause all Securities received by a Foreign Securities System
acting as the subcustodian of such Foreign Custodian to be deposited in a
custody account maintained in the name of such Foreign Custodian for its
customers with such Foreign Securities System for credit to a custody account
maintained in the name of the Bank for its customers with such Foreign Custodian
for credit to a Custody Account;
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(b) collect dividends, interest and other income payments made and stock
dividends, rights and similar Securities paid or issued with respect to
Securities and collect and hold all such payments in a Deposit Account and all
such stock dividends, rights and similar Securities in a Custody Account;
(c) take such steps as may reasonably be necessary to secure or otherwise
prevent the loss of rights relating to any Securities; provided that it shall be
understood that the monitoring of investment data provided by a recognized
international investment data service by the Bank will be deemed to fulfill the
Bank's obligations under this Section 6(c);
(d) promptly notify the Client upon receiving notices or reports of
corporate actions affecting any Securities;
(e) present for payment maturing obligations and those called for
redemption to the extent that the Bank or a Foreign Custodian receives notice of
such opportunities for payment and hold monies received upon presentation of
such maturing obligations for credit to a Deposit Account;
(f) execute in the name of the Client such ownership and other certificates
as may be required to obtain payment in respect of any Securities;
(g) accept, open and act appropriately with respect to all mail directed to
the Client in care of the Bank or a Foreign Custodian;
(h) disclose the Client's name, address and Securities position to the
issuers of Securities when requested to do so by them and approved by the
Client; and
(i) dispose of fractional interests received by the Bank or such Foreign
Custodian as a result of stock dividends by selling any fractional interest
received.
7. (a) The Bank shall have responsibility as a bailee for hire under the
law of the State of New York with respect to any Securities or Cash held by it
or any Foreign Securities System acting as a subcustodian of the Bank. Without
limiting the generality of the foregoing, the Bank will hold the Client harmless
from and indemnify it against any loss that occurs as a result of the negligence
or willful misconduct of the Bank.
(b) The Bank's responsibility with respect to any Securities or Cash held
by a Domestic Subcustodian, any Foreign Custodian or any Foreign Securities
System acting as a subcustodian of such Foreign Custodian is limited to the
failure on the part of the Bank to exercise reasonable care in the selection or
retention of such Domestic Subcustodian, Foreign Custodian or Foreign Securities
System and
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the Bank will hold the Client harmless from and indemnify it against any loss
that occurs as a result of the Bank's failure to exercise such reasonable care.
8. The Bank will, at its sole discretion, accept orders from the Client for
the purchase or sale of Securities and either execute such orders itself or by
means of an affiliate of the Bank or a broker or other financial organization of
its choice, subject to the fees and commissions in effect from time to time.
The Bank will not be responsible for any act or omission, or for the solvency,
of any affiliate, broker or other financial organization selected by the Bank to
effect any transaction for the account of the Client. When instructed to buy or
sell Securities for which the Bank acts as a dealer, the Bank will buy or sell
such Securities from or to either itself, as principal, or such affiliate.
9. The Client agrees that, when the Bank or a Foreign Custodian is
instructed to receive any Securities against payment, it will have sufficient
Cash in the Deposit Accounts or will make sufficient funds available to the Bank
or such Foreign Custodian for such purpose. Any dividends or interest
automatically credited to the Deposit Accounts which are not subsequently
received by the Bank from the corporation making such payment will be reimbursed
to the Bank and the Bank may debit the Deposit Accounts for this purpose.
10. Securities may be registered in the name of the Bank's nominee or, as
to any Securities in the possession of an entity other than the Bank, in the
name of such entity's nominee. The Client agrees to hold such nominees harmless
from any liability as a holder of record of such Securities and will have the
same responsibility as if the Securities were registered in the name of the
Client.
11. The Bank shall be responsible for the performance of only those duties
as are set forth herein or contained in Authorized Instructions given to the
Bank that are not contrary to the provisions of this Agreement. The Bank is not
under any duty to provide the Client with investment advice or to supervise its
investments.
12. Notwithstanding the provisions of Section 7 of this Agreement:
(a) all collections of funds or other property paid or distributed with
respect to any Securities shall be made at the risk of the Client;
(b) the Bank shall have no liability for any loss occasioned by delay in
the actual receipt of notice by the Bank or by a Foreign Custodian of any
payment, redemption, proceeding or other transaction regarding, or of any rights
exercisable by the Client in connection with, any Securities with respect to
which the Bank has agreed to take action as provided in Section 6 of this
Agreement;
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(c) the Bank shall not be liable for any action taken in good faith and in
the exercise of reasonable care upon Authorized Instructions or upon any
certified copy of any vote of the Board of Directors or Trustees of the Client
and may rely on any such documents that it in good faith believes to be validly
executed.
13. The Bank shall forward to the Client communications relating to any
Securities which call for voting or the exercise of rights or other specific
action including materials relating to legal proceedings intended to be
transmitted to holders of such Securities to the extent such communications are
received by the Bank or such Foreign Custodian in time for forwarding to each
client of the Bank. The Bank or such Foreign Custodian will cause its nominee
to execute and deliver to the Client proxies relating to Securities registered
in the name of such nominee but without indicating the manner in which such
proxies are to be voted. Proxies relating to bearer Securities will be
delivered in accordance with Authorized Instructions.
14. The Client agrees to pay the Bank as compensation for its services a
fee computed at rates determined by the Bank from time to time and communicated
to it in advance, as well as all taxes, assessments, charges and expenses
including, without limitation, legal expenses and attorney's fees incurred by
the Bank in connection with the maintenance of the Custody Accounts and Deposit
Accounts and the transfer of Securities and Cash pursuant to the terms of this
Agreement. The Bank is authorized to charge the Deposit Accounts for such items
and such amounts, as well as any other obligation or liability of any kind which
the Client may have to the Bank in connection with this Agreement, and the Bank
may exercise such right of set-off against the Deposit Accounts as may be
accorded it under applicable law. The Client agrees that it is the duty of the
Client to reconcile statements and advices sent to it by mail or electronic
media and that all such statements and advices will be considered final sixty
days from the date of dispatch.
15. The term "Authorized Instructions" means a communication given in
writing by two Authorized Persons and received by the Bank by facsimile
transmission, telegram, teletype, cablegram or other teleprocess or electronic
instruction system which the Bank believes in good faith to have been given by
the Client or which are transmitted with proper testing or authentication
pursuant to terms and conditions specified in writing by the Bank. The Client
agrees to assume all risks which may result from any action taken by the Bank in
reliance in good faith on Authorized Instructions. The term "Authorized
Persons" means those officers of the Client who have been designated by or
pursuant to a vote of the Board of Directors or Trustees, a certified copy of
which has been filed with the Bank, to act on behalf of the Client in the
performance of any acts that Authorized Persons may do under this Agreement
pursuant to such vote. Such persons shall continue to be Authorized Persons
until such time as there has been filed with the Bank a properly certified copy
of a vote of the Board of Directors or Trustees revoking the authority of such
persons. The Client shall safeguard any testkeys, identification codes or other
security devices with which the Bank provides it.
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16. This Agreement may be terminated by the Bank or the Client on 60 days'
written notice to the other party, sent by registered mail. If notice of
termination is given by the Bank, Authorized Persons shall, within 60 days
following the giving of such notice, specify in writing the names of the persons
to whom all Securities and Cash shall be delivered or paid. In such case, the
Bank, subject to the satisfaction of amounts owed to it pursuant to Section 14
hereof, will deliver such Securities and pay such Cash and cause each Foreign
Custodian to deliver any Securities and pay any Cash held by such Foreign
Custodian, to the persons so specified. If within 60 days following the giving
of a notice of termination by the Bank, the Bank does not receive from the
Client the names of the persons to whom such Securities shall be delivered and
such Cash shall be paid, the Bank at its election may deliver such Securities
and pay such Cash, and cause each Foreign Custodian holding any Securities or
Cash to deliver such Securities and pay such Cash to a bank or trust company
doing business in the State of New York to be held and disposed of pursuant to
the provisions of this Agreement or the Authorized Instructions of any
Authorized Persons or may continue to hold such Securities and Cash until the
names of such persons are delivered to the Bank. If notice of termination is
given by the Client, the Bank, subject to the satisfaction of amounts owed to it
pursuant to Section 14 hereof, will deliver such Securities and pay such Cash,
and cause each Foreign Custodian holding any Securities or Cash to deliver such
Securities and pay such Cash, to the persons specified in Authorized
Instructions.
17. Any notice or other communication to the Bank is to be addressed to
Xxxxxx Guaranty Trust Company of New York, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Safekeeping Administration. Any notice or other communication
to the Client is to be mailed postage prepaid and addressed to it in care of B.
R. Xxxxxxxxxx.
18. This Agreement shall bind the successors and assigns of the Bank and
the Client and shall be governed by and construed in accordance with the law of
the State of New York.
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ Xxxxxx Xxxxxx
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Title: Vice President
STATE FARM BALANCED FUND, INC.
By: /s/ Xxx X. Xxxxx
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Title: President
JPMORGAN
APPENDIX A
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The Bank is authorized to cause Securities in the Custody Account and Cash in
the Deposit Account to be held in the following countries or jurisdictions:
Canada Japan
Germany United Kingdom
