UNDERWRITING AGREEMENT
THIS AGREEMENT is made and entered into this 11th day of April, 2001,
by and between STATE FARM VARIABLE PRODUCT TRUST, a Delaware business trust (the
"Trust"), and STATE FARM VP MANAGEMENT CORP., a Delaware corporation (the
"Underwriter").
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Trust issues shares of beneficial interest (the "Shares"),
an unlimited number of which are registered under the Securities Act of 1933, as
amended (the "1933 Act") pursuant to a registration statement initially filed
with the Securities and Exchange Commission (the "SEC") on February 27, 1997, as
amended from time to time (the "Registration Statement");
WHEREAS, the Trust has established six separate series of Shares, each
corresponding to a separate investment portfolio having its own investment
objective, and may establish additional series of Shares in the future (such
existing and future series are collectively referred to herein as the "Funds");
WHEREAS, the Shares are sold exclusively to certain segregated asset
accounts (the "Accounts") of State Farm Life Insurance Company or its affiliated
life insurance companies (collectively, "State Farm") to fund certain variable
annuity and/or life insurance contracts issued by State Farm (the "Contracts");
WHEREAS, the Underwriter is a broker-dealer registered under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and a member of
the National Association of Securities Dealers, Inc. (the "NASD");
WHEREAS, the Trust desires to retain the Underwriter to render certain
distribution services to each Fund in the manner and on the terms and conditions
set forth below; and
WHEREAS, the Underwriter is willing to provide such distribution
services to each Fund in the manner and on the terms and conditions set forth
below;
NOW, THEREFORE, in consideration of their mutual promises, the Trust
and the Underwriter agree as follows:
ARTICLE I
EMPLOYMENT OF UNDERWRITER
1.1 The Trust hereby appoints the Underwriter its exclusive agent for
the distribution of the Shares of each Fund in jurisdictions wherein Shares may
legally be offered for sale.
1.2 The Underwriter hereby accepts appointment as exclusive agent for
the distribution of the Shares and agrees that it will use its best efforts with
reasonable promptness to sell such Shares as from time to time shall be
effectively registered under the 1933 Act to the Accounts (or such other
investors as, from time to time, are described in the Registration Statement) at
a price equal to the net asset value of such Shares determined in accordance
with the Registration Statement, all subject to applicable federal and state
laws and regulations and to the Declaration. Each party hereunder may, in its
discretion, refuse to sell Shares to any person. The Underwriter or its agent
shall be entitled to rely upon the certification of any purchaser that it is an
investor to whom Shares may be offered.
1.3 Notwithstanding any other provision hereof, the Board of Trustees
of the Trust (the "Board") may refuse to sell shares of any Fund to State Farm
and the Accounts, or suspend or terminate the offering of shares of any Fund if
such action is required by law or by regulatory authorities having jurisdiction
or is, in the sole discretion of the Board acting in good faith and in light of
its fiduciary duties under federal and any applicable state laws, necessary in
the best interests of the share holders of such Fund.
1.4 The Underwriter shall as agent of the Trust sell Shares directly in
such manner, not inconsistent with the provisions hereof and the Registration
Statement, as the Underwriter may determine from time to time.
1.5 All Shares offered for sale or sold by the Underwriter shall be so
offered or sold at, and the price the Trust shall receive for all Shares
purchased from the Trust shall be, the net asset value per Share determined in
the manner and at the time set forth in the Declaration and Registration
Statement.
1.6 The Underwriter shall issue and deliver on behalf of the Trust such
confirmations of sales made by it pursuant to this agreement as may be required.
At or prior to the time of delivery of Shares by the Trust or, if the Trust
issues certificates for Shares, on the order of the Underwriter of such
certificates, the
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Underwriter will pay or cause to be paid to the Trust the amount due the
Trust for the sale of such Shares. Certificates shall be issued, if the Trust
issues certificates for Shares, or Shares registered on the transfer books of
the Trust in such names and denominations as the Underwriter may specify.
Nothing herein shall be construed to require the issuance of certificates for
shares by the Trust.
1.7 The Trust will furnish to the Underwriter from time to time such
information with respect to the Trust and its Shares as the Underwriter may
reasonably request for use in connection with the sale of Shares. The
Underwriter agrees that it will not use or distribute or authorize the use,
distribution or dissemination by others in connection with the sale of Shares
any statements, other than those contained in the Registration Statement, except
such supplemental literature or advertising as shall be lawful under federal and
state securities laws and regulations, and that it will furnish the Trust with
copies of all such material.
1.8 The Underwriter shall order Shares from the Trust only to the
extent that it shall have received purchase orders therefor.
1.9 In selling Shares for the account of the Trust, the Underwriter
will in all respects materially conform to the requirements of all applicable
state and federal laws relating to such sale and will indemnify and save
harmless the Trust from any damage or expense on account of any wrongful act by
the Underwriter or any employee, representative or agent of the Underwriter. The
Underwriter will observe and be bound by all the provisions of the Declaration
which at the time in any way require, limit, restrict, prohibit or otherwise
regulate any action on the part of the Underwriter. Notwithstanding anything to
the contrary elsewhere herein, the Underwriter shall sell Shares exclusively to
the Accounts or other segregated asset accounts of State Farm to fund the
Contracts.
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
2.1 The Trust will pay or cause to be paid expenses (including the fees
and disbursements of its own counsel) of any registration of Shares under the
1933 Act and expenses incident to the issuance of Shares, if any, such as the
cost of certificates, issue taxes, and the fees of any transfer agent.
2.2 All other expenses incident to the sale and distribution of the
Shares issued or sold hereunder shall be paid or caused to be paid by State
Farm, to the extent such expenses are allocated in one or more separate
participation agreements to State Farm, or the Underwriter.
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ARTICLE III
LIMITATIONS OF LIABILITY
3.1 LIMITATION OF LIABILITY OF UNDERWRITER. The Underwriter shall give
the Trust the benefit of the Underwriter's best judgment and efforts in
rendering services under this agreement; PROVIDED, that the Underwriter shall
not be liable for any error of judgment or import of law, or for any loss
suffered by the Trust in connection with the matters to which this agreement
relates, except loss resulting from: (i) willful misfeasance, bad faith or gross
negligence on the part of the Underwriter in the performance of its obligations
and duties under this agreement; (ii) its reckless disregard of its obligations
and duties under this agreement; (iii) the sale of Shares to persons other than
the Accounts or other segregated asset accounts of State Farm.
3.2 LIMITATION OF LIABILITY OF TRUST. The Underwriter acknowledges that
it has received notice of and accepts the limitations on the Trust's liability
as set forth in the Trust's Declaration of Trust, as amended from time to time.
In accordance therewith, the Underwriter agrees that the Trust's obligations
hereunder shall be limited to the assets of the Funds, and with respect to each
Fund shall be limited to the assets of such Fund, and no party shall seek
satisfaction of any such obligation from any shareholder of the Trust, nor from
any trustee, officer, employee or agent of the Trust.
ARTICLE IV
DURATION AND TERMINATION OF THIS AGREEMENT
4.1 EFFECTIVE DATE AND TERMINATION. This agreement shall not become
effective unless and until it is approved by the Board, including a majority of
trustees who are not parties to this agreement or interested persons of any such
party to this agreement. This agreement shall come into full force and effect on
the date which it is so approved, provided that it shall not become effective as
to any subsequently created Fund until it has been approved by the Board
specifically for such Fund. As to each Fund, the agreement shall continue in
effect for two years and shall thereafter continue in effect from year to year
so long as such continuance is specifically approved for each Fund at least
annually by: (i) the Board, or by the vote of a majority of the outstanding
votes attributable to the Shares representing an interest in the Fund; and (ii)
a majority of those trustees who are not parties to this agreement or interested
persons of any such party cast in person at a meeting called for the purpose of
voting on such approval.
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4.2 TERMINATION.
A. This agreement may be terminated at any time, without penalty,
by vote of the Board or by vote of the holders of a majority of the outstanding
shares of the Trust, or by the Underwriter, on sixty (60) days' written notice
to the other party.
B. This agreement may be terminated at any time without the payment
of any penalty by vote of the Board in the event that it shall have been
established by a court of competent jurisdiction that the Underwriter or any
officer or director of the Underwriter has taken any action which results in a
breach of the covenants of the Underwriter set forth herein.
C. This agreement shall automatically terminate in the event of its
assignment.
D. The Trust agrees that upon the termination of this agreement at
any time or for any reason it shall, when so requested by State Farm or the
Underwriter, eliminate all reference to the name "State Farm" from its corporate
name and thereafter refrain from using the name "State Farm" in connection with
its business or activities in any form or combination whatsoever.
ARTICLE V
AMENDMENTS TO THIS AGREEMENT
5.1 This agreement may be amended as to each Fund by the parties only
if such amendment is specifically approved by a majority of the trustees of the
Trust.
ARTICLE VI
NOTICES
6.1 Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If to the Trust:
State Farm Variable Product Trust
Xxx Xxxxx Xxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Secretary
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If to the Underwriter:
State Farm VP Management Corp.
Xxx Xxxxx Xxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Secretary
ARTICLE VII
MISCELLANEOUS PROVISIONS
7.1 DEFINITIONS OF CERTAIN TERMS. The terms "assignment" and
"interested person" when used in this agreement shall have the respective
meanings specified in the 1940 Act. The term "majority of the outstanding votes
attributable to the Shares of a Fund" means the lesser of: (a) 67% or more of
the votes attributable to such Shares of the Fund present at a meeting if the
holders or more than 50% of such votes are present or represented by proxy; or
(b) more than 50% of the votes attributable to Shares of the Fund.
7.2 APPLICABLE LAW.
A. This agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of Delaware.
B. This agreement shall be subject to the provisions of the 1933,
1934, and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the SEC
may grant and the terms hereof shall be interpreted and construed in accordance
therewith.
7.3 SEVERABILITY. If any provision of this agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this agreement shall not be affected thereby.
7.4 CAPTIONS. The captions in this agreement are included for
convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
7.5 COUNTERPARTS. This agreement may be executed simultaneously in
multiple counterparts, each of which taken together shall constitute one and the
same instrument.
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7.6 COOPERATION WITH AUTHORITIES. Each party hereto shall cooperate
with the other party and all appropriate governmental authorities (including
without limitation the SEC, the NASD, and state insurance regulators) and shall
permit such authorities reasonable access to its books and records in connection
with any investigation or inquiry relating to this agreement or the transactions
contemplated hereby.
7.7 CUMULATIVE RIGHTS. The rights, remedies and obligations contained
in this agreement are cumulative and are in addition to any and all rights,
remedies and obligations, at law or in equity, which the parties hereto are
entitled to under state and federal laws.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed in their names and on their behalf by their duly authorized officers
all on the day and year first above written.
STATE FARM VP MANAGEMENT CORP.
By: /s/ Xxxxxx X. Xxxx, Xx.
Title: President
STATE FARM VARIABLE PRODUCT TRUST
By: /s/ Xxxxx X. Xxxxxx
Title: Senior Vice President and Treasurer
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