CUSTODIAN CONTRACT
BETWEEN
STATE FARM VARIABLE PRODUCT TRUST
AND
BARCLAYS GLOBAL INVESTORS, N.A.
TABLE OF CONTENTS
Page
----
1. EMPLOYMENT OF CUSTODIAN. . . . . . . . . . . . . . . . . . . . . . . . .1
2. DUTIES OF THE CUSTODIAN. . . . . . . . . . . . . . . . . . . . . . . . .1
2.1 Holding Securities . . . . . . . . . . . . . . . . . . . . . . . . .1
2.2 Delivery of Securities . . . . . . . . . . . . . . . . . . . . . . .1
2.3 Registration of Securities . . . . . . . . . . . . . . . . . . . . .3
2.4 Bank Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . .4
2.5 Availability of Federal Funds. . . . . . . . . . . . . . . . . . . .4
2.6 Collection of Income . . . . . . . . . . . . . . . . . . . . . . . .4
2.7 Payment of Monies. . . . . . . . . . . . . . . . . . . . . . . . . .5
2.8 Acting Pursuant to Proper Instructions . . . . . . . . . . . . . . .6
2.9 Appointment of Agents. . . . . . . . . . . . . . . . . . . . . . . .6
2.10 Deposit of Securities in U.S. Securities Systems. . . . . . . . . .6
2.11 Segregated Account. . . . . . . . . . . . . . . . . . . . . . . . .7
2.12 Ownership Certificates for Tax Purposes . . . . . . . . . . . . . .7
2.13 Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
2.14 Communications Relating to Trust Portfolio Securities . . . . . . .8
2.15 Reports to Trust by Independent Public Accountants. . . . . . . . .8
3. PAYMENTS FOR REPURCHASE OR REDEMPTION AND SALES OF SHARES OF THE FUNDS .8
4. PROPER INSTRUCTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . .9
5. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY. . . . . . . . . . . . . . .9
6. EVIDENCE OF AUTHORITY. . . . . . . . . . . . . . . . . . . . . . . . . .9
7. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND
CALCULATION OF NET ASSET VALUE AND NET INCOME . . . . . . . . . . . . .9
8. RECORDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
9. OPINION OF TRUST'S INDEPENDENT ACCOUNTANTS . . . . . . . . . . . . . . 10
10. COMPENSATION OF CUSTODIAN. . . . . . . . . . . . . . . . . . . . . . . 10
11. RESPONSIBILITY OF CUSTODIAN. . . . . . . . . . . . . . . . . . . . . . 10
12. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT. . . . . . . . . . . . . . 11
13. SUCCESSOR CUSTODIAN. . . . . . . . . . . . . . . . . . . . . . . . . . 12
14. INTERPRETIVE AND ADDITIONAL PROVISIONS . . . . . . . . . . . . . . . . 12
15. CALIFORNIA LAW TO APPLY. . . . . . . . . . . . . . . . . . . . . . . . 13
16. PRIOR CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
17. REPRODUCTION OF DOCUMENTS. . . . . . . . . . . . . . . . . . . . . . . 13
18. SHAREHOLDER COMMUNICATIONS ELECTION. . . . . . . . . . . . . . . . . . 13
19. TAX LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
20. REIMBURSEMENT OF ADVANCES. . . . . . . . . . . . . . . . . . . . . . . 14
21. REPRESENTATIVE CAPACITY AND BINDING OBLIGATION . . . . . . . . . . . . 15
22. SEVERAL OBLIGATIONS OF THE PORTFOLIOS. . . . . . . . . . . . . . . . . 15
CUSTODIAN CONTRACT
This Contract between State Farm Variable Product Trust ("Trust"), a
business trust organized and existing under the laws of the State of Delaware,
having its principal place of business at Xxx Xxxxx Xxxx Xxxxx, Xxxxxxxxxxx,
Xxxxxxxx 00000, and Barclays Global Investors, N.A. ("Custodian") having its
principal place of business at 00 Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX 00000, is
dated as of January 21, 1998.
WITNESSETH: In consideration of the mutual covenants and agreements
hereinafter contained, the parties agree as follows:
1. EMPLOYMENT OF CUSTODIAN
The Trust hereby employs the Custodian as the custodian of two of the
Trust's six separate investment portfolios: the Large Cap Equity Index Fund and
the Small Cap Equity Index Fund (the "Funds" or the "Fund"). The Trust agrees to
deliver to the Custodian all securities and cash owned by each Fund, and all
payments of income, payments of principal or capital distributions received by
the Trust with respect to all securities owned by the Fund from time to time,
and the cash consideration received by the Trust for such new or treasury shares
of capital stock ("Shares") of the Fund as may be issued or sold from time to
time. The Custodian shall not be responsible for any property of the Fund held
or received by the Trust and not delivered to the Custodian.
2. DUTIES OF THE CUSTODIAN
2.1 HOLDING SECURITIES. The Custodian shall hold and physically
segregate for the account of the Trust on behalf of each Fund all
non-cash property, including all investments owned by the Fund,
other than (a) securities which are maintained pursuant to Section
2.10 in a clearing agency which acts as a securities depository or
in a book-entry system authorized by the U.S. Department of the
Treasury and certain federal agencies (each, a "U.S. Securities
System").
2.2 DELIVERY OF SECURITIES. The Trust on behalf of each Fund, by Proper
Instructions (which may be continuing instructions when deemed
appropriate by the parties), will direct Custodian to release and
deliver securities owned by each Fund held by the Custodian or in a
U.S. Securities System account of the Custodian only:
1) Upon sale of such securities and receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Trust
on behalf of the Fund;
1
3) In the case of a sale effected through a U.S. Securities
System, in accordance with the provisions of Section 2.10
hereof;
4) To the depository agent in connection with tender or other
similar offers for securities;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable;
provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the
name of the Trust on behalf of each Fund or into the name of
any nominee or nominees of the Custodian or into the name or
nominee name of any agent appointed pursuant to Section 2.9 or
into the name or nominee name of any sub-custodian appointed
pursuant to Article 1; or for exchange for a different number
of bonds, certificates or other evidence representing the same
aggregate face amount or number of units; provided that, in
any such case, the new securities are to be delivered to the
Custodian;
7) Upon the sale of such securities for the account Trust on
behalf of the Fund, to the broker or its clearing agent,
against a receipt, for examination in accordance with "street
delivery" custom; provided that in any such case, the
Custodian shall have no responsibility or liability for any
loss arising from the delivery of such securities prior to
receiving payment for such securities except as may arise from
the Custodian's own negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion contained
in such securities, or pursuant to any deposit agreement;
provided that, in any such case, the new securities and cash,
if any, are to be delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; provided that,
in any such case, the new securities and cash, if any, are to
be delivered to the Custodian;
10) For delivery in connection with any loans of securities made
by the Trust on behalf of the Fund, but only against receipt
of adequate collateral as agreed upon from time to time by the
Custodian and the Trust, which may be in the form of cash or
obligations issued by the United States government, its
agencies or instrumentalities, except that
2
in connection with any loans for which collateral is to be
credited to the Custodian's account in the book-entry system
authorized by the U.S. Department of the Treasury, the
Custodian will not be held liable or responsible for the
delivery of securities owned by the Fund prior to the receipt
of such collateral;
11) For delivery as security in connection with any borrowings by
the Trust on behalf of the Fund requiring a pledge of assets,
but only against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any
agreement among the Trust on behalf of the Fund, the Custodian
and a broker-dealer registered under the Securities Exchange
Act of 1934 ("Exchange Act") and a member of The National
Association of Securities Dealer, Inc. ("NASD"), relating to
compliance with the rules of The Options Clearing Corporation
and of any registered national securities exchange, or of any
similar organization or organizations, regarding escrow or
other arrangements in connection with transactions by the
Trust;
13) For delivery in accordance with the provisions of any
agreement among the Trust on behalf of the Fund, the
Custodian, and a Futures Commission Merchant registered under
the Commodity Exchange Act, relating to compliance with the
rules of the Commodity Futures Trading Commission and/or any
Contract Market or any similar organization or organizations,
regarding account deposits in connection with transactions by
the Trust;
14) Upon receipt of instructions from the transfer agent
("Transfer Agent") for the Trust on behalf of the Fund, for
delivery to such Transfer Agent or to the holders of shares in
connection with distributions in kind, as may be described
from time to time in the Trust's currently effective
prospectus and statement of additional information
("prospectus"), in satisfaction of requests by holders of
Shares for repurchase or redemption; and
15) For any other proper corporate purpose.
2.3 REGISTRATION OF SECURITIES. Securities held by the Custodian (other
than bearer securities) shall be registered in the name of Trust on
behalf of the Fund or in the name of any nominee of the Trust or of
any nominee of the Custodian which nominee shall be assigned
exclusively to the Trust, unless the Trust has authorized in writing
the appointment of a nominee to be used in common with other
registered investment companies having the same investment adviser
as the Trust, or in the name or nominee name of any agent appointed
pursuant to Section 2.9 or in the name or nominee name of any
sub-custodian appointed pursuant to Article 1. All securities
accepted by the Custodian on behalf of the Trust under the terms of
this Contract shall
3
be in "street name" or other good delivery form. If, however, the
Trust directs the Custodian to maintain securities in "street name",
the Custodian shall utilize its best efforts only to timely collect
income due the Trust on such securities and to notify the Trust on a
best efforts basis only of relevant corporate actions including,
without limitation, pendency of calls, maturities, tender or
exchange offers.
2.4 BANK ACCOUNTS. The Custodian shall open and maintain a separate
bank account or accounts in the United States in the name of the
Trust on behalf of each Fund, subject only to draft or order by the
Custodian acting pursuant to the terms of this Contract, and shall
hold in such account or accounts, subject to the provisions hereof,
all cash received by it from or for the account of the Trust, other
than cash maintained by the Trust in a bank account established and
used in accordance with Rule 17f-3 under the Investment Company Act
of 1940. Funds held by the Custodian for the Trust may be deposited
by it to its credit as Custodian in such other banks or trust
companies as it may in its discretion deem necessary or desirable;
provided, however, that every such bank or trust company shall be
qualified to act as a custodian under the Investment Company Act of
1940 and that each such bank or trust company and the funds to be
deposited with each such bank or trust company shall be approved by
vote of a majority of the Board of Trustees. Such funds shall be
deposited by the Custodian in its capacity as Custodian and shall be
withdrawable by the Custodian only in that capacity.
2.5 AVAILABILITY OF FEDERAL FUNDS. Upon mutual agreement between Trust
on behalf of the Funds and the Custodian, the Custodian shall, upon
the receipt of Proper Instructions, make federal funds available to
the Trust as of specified times agreed upon from time to time by the
Trust and the Custodian in the amount of checks received in payment
for Shares of the Fund which are deposited into the Trust's account.
2.6 COLLECTION OF INCOME. Subject to the provisions of Section 2.3, the
Custodian shall collect on a timely basis all income and other
payments with respect to United States registered securities held
hereunder to which the Trust on behalf of each Fund shall be
entitled either by law or pursuant to custom in the securities
business, and shall collect on a timely basis all income and other
payments with respect to United States bearer securities if, on the
date of payment by the issuer, such securities are held by the
Custodian or its agent thereof and shall credit such income, as
collected, to the Trust's custodian account. Without limiting the
generality of the foregoing, the Custodian shall detach and present
for payment all coupons and other income items requiring
presentation as and when they become due and shall collect interest
when due on securities held hereunder. Income due the Trust on
United States securities loaned pursuant to the provisions of
Section 2.2 (10) shall be the responsibility of the Trust. The
Custodian will have no duty or responsibility in connection
therewith, other than to provide the Trust with such information or
data as may be necessary to assist the
4
Trust in arranging for the timely delivery to the Custodian of the
income to which the Trust is properly entitled.
2.7 PAYMENT OF MONIES. The Trust, by Proper Instructions (which may be
continuing instructions when deemed appropriate by the parties),
shall direct the Custodian to pay out monies of the Trust on behalf
of the Fund only:
1) Upon the purchase of securities, options, futures contracts or
options on futures contracts for the account of the Trust but
only (a) against the delivery of such securities, or evidence
of title to such options, futures contracts or options on
futures contracts, to the Custodian (or any bank, banking firm
or trust company doing business in the United States or abroad
which is qualified under the Investment Company Act of 1940,
as amended, to act as a custodian and has been designated by
the Custodian as its agent for this purpose) registered in the
name of the Trust or in the name of a nominee of the Custodian
referred to in Section 2.3 hereof or in proper form for
transfer; (b) in the case of a purchase effected through a
U.S. Securities System, in accordance with the conditions set
forth in Section 2.10 hereof; (c) in the case of repurchase
agreements entered into between the Trust and the Custodian,
or another bank, or a broker-dealer which is a member of NASD,
(i) against delivery of the securities either in certificate
form or through an entry crediting the Custodian's account at
the Federal Reserve Bank with such securities or (ii) against
delivery of the receipt evidencing purchase by the Trust of
securities owned by the Custodian along with written evidence
of the agreement by the Custodian to repurchase such
securities from the Trust or (d) for transfer to a time
deposit account of the Trust in any bank such transfer may be
effected prior to receipt of a confirmation from a broker
and/or the applicable bank pursuant to Proper Instructions
from the Trust as defined in Article 5;
2) In connection with conversion, exchange or surrender of
securities as set forth in Section 2.2 hereof;
3) For the redemption or repurchase of Shares as set forth in
Article 3 hereof;
4) For the payment of any expense or liability incurred by the
Trust on behalf of the Fund, including but not limited to the
following payments for the account of the Trust; interest,
taxes, management, accounting, transfer agent and legal fees,
and operating expenses whether or not such expenses are to be
in whole or part capitalized or treated as deferred expenses;
5) For the payment of any dividends declared pursuant to the
governing documents;
5
6) For payment of the amount of dividends received in respect of
securities sold short; and
7) For any other proper purpose.
2.8 ACTING PURSUANT TO PROPER INSTRUCTIONS. Provided that the Custodian
acts in accordance with Proper Instructions, it shall have no
liability for actions taken or declined to be taken.
2.9 APPOINTMENT OF AGENTS. Subject to the approval of the Trust or the
Advisor of the Trust, the Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or
trust company which is itself qualified under the Investment Company
Act of 1940, as amended, to act as a custodian, as its agent to
carry out such of the provisions of this Article 2 as the Custodian
may from time to time direct; provided, however, that the
appointment of any agent shall not relieve the Custodian of its
responsibilities or liabilities hereunder.
2.10 DEPOSIT OF SECURITIES IN U.S. SECURITIES SYSTEMS. Upon receipt of
Proper Instructions, the Custodian may deposit and/or maintain
securities held by the Trust on behalf of each Fund in a clearing
agency registered with the Securities and Exchange Commission under
Section 17A of the Exchange Act, which acts as a securities
depository, or in the book-entry system authorized by the U.S.
Department of the Treasury and certain federal agencies,
collectively referred to herein as "U.S. Securities System" in
accordance with applicable Federal Reserve Board and Securities and
Exchange Commission rules and regulations, if any, and subject to
the following provisions:
1) The Custodian may keep securities in a U.S. Securities System
provided that such securities are represented in an account
("Account") of the Custodian in the U.S. Securities System
which shall not include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise for
customers;
2) The records of the Custodian with respect to securities of the
Trust which are maintained in a U.S. Securities System shall
identify by book-entry those securities belonging to the
Trust;
3) The Custodian shall pay for securities purchased for the
account of the Trust on behalf of the Fund upon (i) receipt of
advice from the U.S. Securities System that such securities
have been transferred to the Account, and (ii) the making of
an entry on the records of the Custodian to reflect such
payment and transfer for the account of the Trust. The
Custodian shall transfer securities sold for the account of
the Trust upon (i) receipt of advice from the U.S. Securities
System that payment for such securities has been transferred
to the Account, and (ii) the making of an entry on the records
of the Custodian to
6
reflect such transfer and payment for the account of the
Trust. Copies of all advices from the U.S. Securities System
of transfers of securities for the account of the Trust shall
identify the Trust, be maintained for the Trust by the
Custodian and be provided to the Trust at its request. Upon
request, the Custodian shall furnish the Trust confirmation of
each transfer to or from the account of the Trust in the form
of a written advice or notice and shall furnish to the Trust
copies of daily transaction sheets reflecting each day's
transactions in the U.S. Securities System for the account of
the Trust;
4) The Custodian shall provide the Trust with any report obtained
by the Custodian on the U.S. Securities System's accounting
system, internal accounting control and procedures for
safeguarding securities deposited in the U.S. Securities
System; and
5) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Trust for any loss or damage
to the Trust resulting from the failure of the Custodian or
any agent to enforce effectively such rights as it may have
against the U.S. Securities System; at the election of the
Trust, it shall be entitled to be subrogated to the rights of
the Custodian with respect to any claim against the U.S.
Securities System or any other person which the Custodian may
have as a consequence of any such loss or damage if and to the
extent that the Trust has not been made whole for any such
loss or damage.
2.11 SEGREGATED ACCOUNT. Upon receipt of Proper Instructions, the
Custodian shall establish and maintain a segregated account or
accounts for the Trust on behalf of each Fund in order to comply
with applicable federal securities or commodities laws. Upon
receipt of Proper Instructions, the Custodian shall transfer into
such segregated accounts such cash and/or securities, including
securities maintained in an account by the Custodian pursuant to
Section 2.10 hereof, as it may be directed. In lieu of establishing
a segregated account or accounts, Custodian, upon receipt of Proper
Instructions, shall earmark cash or securities to comply with
applicable federal securities.
2.12 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall
execute ownership and other certificates and affidavits for all
federal and state tax purposes in connection with receipt of income
or other payments with respect to the securities of the Trust held
by it and in connection with transfers of such securities.
2.13 PROXIES. The Custodian shall, with respect to the securities held
hereunder, cause to be promptly executed by the registered holder of
such securities, if the securities are registered otherwise than in
the name of the Trust or a nominee of the Trust, all proxies,
without indication of the manner in which such proxies are to be
voted, and shall promptly deliver to the Trust such
7
proxies, all proxy soliciting materials and all notices relating to
such securities.
2.14 COMMUNICATIONS RELATING TO TRUST PORTFOLIO SECURITIES. Subject to
the provisions of Section 2.3, the Custodian shall transmit promptly
to the Trust all written information (including, without limitation,
pendency of calls and maturities of securities and expirations of
rights in connection therewith and notices of exercise of call and
put options written by the Trust on behalf of the Fund and the
maturity of futures contracts purchased or sold by the Trust on
behalf of the Fund) received by the Custodian from issuers of the
securities being held for the Trust. With respect to tender or
exchange offers, the Custodian shall transmit promptly to the Trust
all written information, received by the Custodian from issuers of
the securities whose tender or exchange is sought and from the party
(or his agents) making the tender or exchange offer. If the Trust
desires to take action with respect to any tender offer, exchange
offer or any other similar transaction, the Trust shall notify the
Custodian at least three business days prior to the date on which
the Custodian is to take such action.
2.15 REPORTS TO TRUST BY INDEPENDENT PUBLIC ACCOUNTANTS. The Custodian
shall provide the Trust, at such times as the Trust may reasonably
require, with reports by independent public accountants on the
accounting system, internal accounting control and procedures for
safeguarding securities, futures contracts and options on futures
contracts, including securities deposited and/or maintained in a
U.S. Securities System, relating to the services provided by the
Custodian under this Contract; such reports shall be of sufficient
scope and in sufficient detail, as may reasonably be required by the
Trust to provide reasonable assurance that any material inadequacies
would be disclosed by such examination, and, if there are no such
inadequacies, the reports shall so state.
3. PAYMENTS FOR REPURCHASE OR REDEMPTION AND SALES OF SHARES OF THE FUNDS
From such funds as may be available for the purpose, the Custodian shall,
upon receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares of the Fund who have delivered to the Transfer
Agent a request for redemption or repurchase of their Shares. In connection
with the redemption or repurchase of Shares of the Fund, the Custodian is
authorized upon receipt of instructions from the Transfer Agent to wire funds to
or through a commercial bank designated by the redeeming shareholders.
The Custodian shall receive from the distributor for each Fund's Shares or
from the Transfer Agent and deposit into the Trust's account such payments as
are received for Shares of the Fund issued or sold from time to time. The
Custodian will provide timely notification to the Trust and the Transfer Agent
of any receipt by it of payments for Shares of the Fund.
8
4. PROPER INSTRUCTIONS
Proper Instructions as used herein means a writing signed or initialed by
one or more person or persons as the Board of Trustees shall have from time to
time authorized. Each such writing shall set forth the specific transaction or
type of transaction involved, including a specific statement of the purpose for
which such action is requested. Oral instructions will be considered Proper
Instructions if the Custodian reasonably believes them to have been given by a
person authorized to give such instructions with respect to the transaction
involved. The Trust shall cause all oral instructions to be confirmed in
writing. Upon receipt of a certificate of the Secretary or an Assistant
Secretary as to the authorization by the Board of Trustees of the Trust
accompanied by a detailed description of procedures approved by the Board of
Trustees, Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the Board of
Trustees and the Custodian are satisfied that such procedures afford adequate
safeguard's for the Fund's assets. For purposes of this Section, Proper
Instructions shall include instructions received by the Custodian pursuant to
any three-party agreement which requires a segregated asset account in
accordance with Section 2.11.
5. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY
The Custodian may in its discretion, without express authority from the
Trust:
1) surrender securities in temporary form for securities in
definitive form;
2) endorse for collection, in the name of the Trust on behalf of
the Fund, checks, drafts and other negotiable instruments;
and
3) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with the securities and property
of the Trust except as otherwise directed by the Board of
Trustees.
6. EVIDENCE OF AUTHORITY
The Custodian shall be protected in acting upon any instructions, notice,
request, consent, certificate or other instrument or paper believed by it to be
genuine and to have been properly executed by or on behalf of the Trust. The
Custodian may receive and accept a certified copy of a vote of the Board of
Trustees as conclusive evidence (a) of the authority of any person to act in
accordance with such vote or (b) of any determination or of any action by the
Board of Trustees pursuant to the Declaration of Trust as described in such
vote, and such vote may be considered as in full force and effect until receipt
by the Custodian of written notice to the contrary.
7. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND
CALCULATION OF NET ASSET VALUE AND NET INCOME
The Custodian shall have no obligation to keep the books of account Trust
and/or each Fund and no obligation to compute the net asset value per share of
the outstanding
9
shares of each Fund. The Custodian shall, however, cooperate with and supply
necessary information to the entity or entities appointed by the Board of
Trustees to keep the books of account of the Trust and/or Fund and/or compute
the net asset value per share of the outstanding shares of the Fund.
8. RECORDS
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will meet the
obligations of the Trust under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder.
All such records shall be the property of the Trust and shall at all reasonable
times during the regular business hours of the Custodian be open for inspection
by duly authorized officers, employees or agents of the Trust and employees and
agents of the Securities and Exchange Commission. The Custodian shall, at the
Trust's request, supply the Trust with a tabulation of securities owned by the
Fund and held by the Custodian and shall, when requested to do so by the Trust
and for such compensation as shall be agreed upon between the Trust and the
Custodian, include certificate numbers in such tabulations.
9. OPINION OF TRUST'S INDEPENDENT ACCOUNTANTS
The Custodian shall take such reasonable action, as the Trust may from time
to time request, to obtain from year to year favorable opinions from the Trust's
independent accountants with respect to its activities hereunder in connection
with the preparation of the Trust's Form N-1A, and Form N-SAR or other annual
reports to the Securities and Exchange Commission and with respect to any other
requirements of such Commission.
10. COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to reasonable compensation for its services
and expenses as Custodian, as agreed upon from time to time between the Trust
and the Custodian.
11. RESPONSIBILITY OF CUSTODIAN
So long as and to the extent that it is in the exercise of reasonable care,
the Custodian shall not be responsible for the title, validity or genuineness of
any property or evidence of title thereto received by it or delivered by it
pursuant to this Contract and shall be held harmless by the Trust and/or each
Fund in acting upon any notice, request, consent, certificate or other
instrument reasonably believed by it to be genuine and to be signed by the
proper party or parties, including any futures commission merchant acting
pursuant to the terms of a three-party futures or options agreement. The
Custodian shall be held to the exercise of reasonable care in carrying out the
provisions of this Contract, but shall be kept indemnified by and shall be
without liability to the Trust and/or the Fund for any action taken or omitted
by it without negligence. It shall be entitled to rely on and may act upon
advice of counsel (who may be counsel for the Trust) on all matters, and shall
be without liability for any action reasonably taken or omitted pursuant to such
advice.
10
Except as may arise from the Custodian's own negligence or willful
misconduct, the Custodian shall be without liability to the Trust and/or each
Fund for any loss, liability, claim or expense resulting from or caused by;
(i) events or circumstances beyond the reasonable control of the Custodian or
any agent or nominee, including, without limitation, nationalization or
expropriation, imposition of currency controls or restrictions, the
interruption, suspension or restriction of trading on or the closure of any
securities market, power or other mechanical or technological failures or
interruptions, computer viruses or communications disruptions, acts of war or
terrorism, riots, revolutions, work stoppages, natural disasters or other
similar events or acts; (ii) errors by the Trust in its instructions to the
Custodian; (iii) the insolvency of or acts or omissions by a Securities System;
(iv) any delay or failure of any broker, agent or intermediary, central bank or
other commercially prevalent payment or clearing system to deliver to the
custodian's sub-custodian or agent securities purchased or in the remittance or
payment made in connection with securities purchased or in the remittance or
payment made in connection with securities sold; (v) any delay or failure of any
company, corporation, or other body in charge of registering or transferring
securities in the name of the Custodian, the Trust, the Custodian's
sub-custodians, nominees or agents or any consequential losses arising out of
such delay or failure to transfer such securities including non-receipt of
bonus, dividends and rights and other accretions or benefits; (vi) delays or
inability to perform its duties due to any disorder in market infrastructure
with respect to any particular security or Securities System; and (vii) any
provision of any present or future law or regulation or order of the United
States of America, or any state thereof, or any other country, or political
subdivision thereof or of any court of competent jurisdiction.
If the Trust requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned to
the Trust being liable for the payment of money or incurring liability of some
other form, the Trust, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
In no event shall the Custodian be liable to the Trust and/or each Fund for
indirect, special or consequential damages, unless such damages arise out of the
willful misconduct or bad faith of the Custodian. In no event shall the Trust
and/or each Fund be liable to the Custodian for indirect, special or
consequential damages, unless such damages arise out of the willful misconduct
or bad faith of the Trust and/or each Fund.
12. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
This Contract shall become effective as of its execution, shall continue in
full force and effect until terminated as hereinafter provided, may be amended
at any time by mutual agreement of the parties hereto and may be terminated by
either party by an instrument in writing delivered or mailed, postage prepaid to
the other party, such termination to take effect not sooner than sixty (60) days
after the date of such delivery or mailing; provided, however, that the Trust
shall not amend or terminate this Contract in contravention of any applicable
federal or state regulations, or any provision of the Declaration of Trust, and
further provided, that the Trust may at any time by action of its Board of
Trustees (i) substitute another bank or trust company for the Custodian by
giving notice as described
11
above to the Custodian, or (ii) immediately terminate this Contract in the event
of the appointment of a conservator or receiver for the Custodian by the
comptroller of the currency or upon the happening of a like event at the
direction of an appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Contract, the Trust shall pay to the Custodian such
compensation as may be due as of the date of such termination and shall likewise
reimburse the Custodian for its costs, expenses and disbursements.
13. SUCCESSOR CUSTODIAN
If a successor custodian shall be appointed by the Board of Trustees, the
Custodian shall, upon termination, deliver to such successor custodian at the
office of the Custodian, duly endorsed and in the form for transfer, all
securities then held by it hereunder and shall transfer to an account of the
successor custodian all of the Trust's securities held in a Securities System.
If the Board of Trustees fails to appoint a successor custodian on or
before the date when termination of this Contract shall become effective, then
the Custodian shall have the right to deliver to a bank or trust company, which
is a "bank" as defined in the Investment Company Act of 1940, of its own
selection, having an aggregate capital, surplus, and undivided profits, as shown
by its last published report, of not a less than $25,000,000, all securities,
funds and other properties held by the Custodian and all instruments held by the
Custodian relative thereto and all other property held by it under this Contract
and to transfer to an account of such successor custodian all of the Trust's
securities held in any Securities System. Thereafter, such bank or trust
company shall be the successor of the Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Board of Trustees to appoint a successor custodian, the Custodian
shall be entitled to fair compensation for its services during such period as
the Custodian retains possession of such securities, funds and other properties
and the provisions of this Contract relating to the duties and obligations of
the Custodian shall remain in full force and effect.
14. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Contract, the Custodian and the
Trust may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Contract as may in their joint opinion be
consistent with the general tenor of this Contract. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the Declaration of Trust . No interpretive or additional provisions made as
provided in the preceding sentence shall be deemed to be an amendment of this
Contract.
12
15. CALIFORNIA LAW TO APPLY
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the State of California, without
application of principles of conflicts of law.
16. PRIOR CONTRACTS
This Contract supersedes and terminates, as of the date hereof, all prior
contracts and agreements between the Trust and the Custodian relating to the
custody of the Trust's assets.
17. REPRODUCTION OF DOCUMENTS
This Contract and all schedules, exhibits, attachments and amendments
hereto may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties hereto
each agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
18. SHAREHOLDER COMMUNICATIONS ELECTION
Securities and Exchange Commission rule 14b-2 requires banks which hold
securities for the account of customers to respond to requests by issuers of
securities for the names, addresses and holdings of beneficial owners of
securities of that issuer held by the bank unless the beneficial owner has
expressly objected to disclosure of this information. In order to comply with
the rule, the Custodian needs the Trust to indicate whether it authorizes the
Custodian to provide the Trust's name, address, and share position to requesting
companies whose securities the Trust holds on behalf of the Fund. If the Trust
tells the Custodian "yes" or does not check either "yes" or "no" below, the
Custodian is required by the rule to treat the Trust as consenting to disclosure
of this information for all securities held by the Trust on behalf of the Fund.
For the Trust's protection, the rule prohibits the requesting company from using
the Trust's name and address for any purpose other than corporate
communications. Please indicate below whether the Trust consents or objects by
checking one of the alternatives below.
YES [ ] The Custodian is authorized to
release the Trust's name, address,
and share positions.
NO [ ] The Custodian is not authorized to
release the Trust's name, address,
and share positions.
19. TAX LAW
13
Custodian shall have no responsibility or liability for any obligations now
or hereafter imposed on the Trust or the Custodian as custodian by the tax law
of the United States of America or any state or political subdivision thereof.
It shall be the responsibility of the Trust to notify the Custodian of the
obligations imposed on the Trust by the tax law of jurisdictions other than
those mentioned in the above sentence, including responsibility for withholding
and other taxes, assessments or other governmental charges, certifications and
governmental reporting. The sole responsibility of the Custodian with regard to
such tax law shall be to use reasonable efforts to assist the Trust with respect
to any claim for exemption or refund under the tax law of jurisdictions for
which the Trust provided such information.
20. REIMBURSEMENT OF ADVANCES
If the Trust requires the Custodian, it affiliates, subsidiaries or agent,
to advance cash or securities or provide conditional credit for any purpose
(including but not limited to securities settlements, and assumed settlement) 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 Contract, 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 the Trust shall be security
therefor and should the Trust fail to repay the Custodian promptly, the
Custodian shall be entitled to utilize available cash and to dispose of the
Trust's assets to the extent necessary to obtain reimbursement.
14
21. REPRESENTATIVE CAPACITY AND BINDING OBLIGATION
A copy of the Declaration of Trust is on file with The Secretary of the
State of Delaware, and notice is hereby given that this Contract is not executed
on behalf of the Trustees of the Trust as individuals, and the obligations of
this Contract are not binding upon any of the Trustees, officers, shareholders,
employees or agents of the Trust individually but are binding only upon the
assets and property of each Fund.
The Custodian agrees that no shareholder, trustee, officer, employee or
agent of the Trust may be held personally liable or responsible for any
obligations of the Trust arising out of this Contract.
22. SEVERAL OBLIGATIONS OF THE PORTFOLIOS
With respect to any obligations of the Trust on behalf of each Fund and
each of the related Accounts arising out of this Contract, the Custodian shall
look for payment or satisfaction of any obligation solely to the assets and
property of each Fund and such Accounts to which such obligation relates as
though the Trust had separately contracted with the Custodian by separate
written instrument with respect to each Fund and its related Accounts.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 21st day of January, 1998.
Attest: STATE FARM VARIABLE ANNUITY
PRODUCT TRUST
/s/ Xxxxxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxxx
--------------------------------- --------------------------------
(Name) Xxxxxxxx Xxxxxx [Name] Xxxxx X. Xxxxxx
Assistant Secretary [Title] Assistant Vice President
and Secretary
Attest: BARCLAYS GLOBAL INVESTORS, N.A.
/s/ Xxxxxx Xxxxx By: /s/ Xxx Xxxxxxxxxxxxxx
--------------------------------- --------------------------------
(Name) Xxxxxx Xxxxx [Name] Xxx Xxxxxxxxxxxxxx
Secretary Associate [Title] Managing Director
BARCLAYS GLOBAL INVESTORS, N.A.
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
[Name] Xxxxxxx Xxxxxx
[Title] Principal
15
