Exhibit 3
CUSTODIAL SERVICES AGREEMENT
FOR DOMESTIC ASSETS
AGREEMENT dated as of September 19, 1994 between BANKERS TRUST
COMPANY ("Bank") and TEACHERS INSURANCE AND ANNUITY ASSOCIATION ("TIAA") on
behalf of each investment portfolio of the TIAA Separate Account VA-1 listed on
Exhibit A attached hereto, as such Exhibit may be amended from time to time
(each such investment portfolio being referred to herein as a "Variable
Account").
WHEREAS, the parties desire to arrange for the custody of
certain assets of TIAA, specifically those of each Variable Account, by the
Bank;
NOW THEREFORE, in consideration of the mutual agreement made
herein, the Bank and TIAA agree as follows:
1. Establishment of Accounts
a. Bank agrees to open and maintain custodial account(s)
("Custody Account(s)") on behalf of the Variable Account, or such other TIAA
portfolios or accounts ("TIAA Accounts") as the parties may from time to time
agree to include within the scope of this Agreement, for any and all securities
or other property acceptable to Bank received by Bank for the account of each
Variable Account.
b. Bank also hereby agrees to establish and maintain one or
more deposit accounts ("Deposit Accounts") for all cash (including cash proceeds
from the sale of such securities and similar investments and cash monies
hereinafter termed "Cash")
received by Bank for the Variable Account. Such Custody and Deposit Accounts
will be in the name of the Variable Account or in the name of Bank or Bank's
branches, on behalf of the Variable Account.
It is hereby agreed that all securities, Cash, or other
property now or hereinafter held by Bank hereunder are held for the Variable
Account and are to be maintained and disposed of by Bank only for the Variable
Account in accordance with the terms and conditions set forth in this Agreement.
2. Location of Assets
a. Securities, cash and other property are permitted to be
held by
(1) Bank at any of its offices wherever located; and
(2) domestic securities depositories ("Securities
Depositories") selected by Bank with the approval of TIAA on behalf of the
Variable Account.
b. Such entities described in (2) above shall be deemed to be
Sub-Custodians of Bank, and all securities, Cash and other property held by such
entities shall, unless otherwise specifically agreed to in writing by Bank and
TIAA, be considered for all purposes of this agreement as being held directly by
Bank and subject to the terms of this Agreement.
c. For purposes of this Agreement, a Securities Depository
shall mean a system for the handling of securities of any particular class or
series of any particular issuer deposited
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therein which may be treated as a part of a fungible bulk and may be transferred
by bookkeeping entry without physical delivery of such securities. With respect
to a Securities Depository, such entity shall be a clearing agency registered
with the Securities and Exchange Commission ("Commission") under Section 17A of
the Securities Exchange Act of 1934 ("Exchange Act"), which acts as a securities
depository, or the book-entry system authorized by the U.S. Department of the
Treasury and certain federal agencies in accordance with applicable Federal
Reserve Board and Commission rules and regulations.
3. Bank's Duties
a. Bank will be responsible for the safekeeping, handling,
servicing and disposition of all securities, cash or other property of the
Variable Account held by it hereunder including, without limitation, any and all
of the Variable Account's Cash held by or received by Bank in the name of the
Variable Account or Bank's name.
b. Bank agrees to be liable and to indemnify and hold TIAA
harmless for any and all liability for loss or damage to TIAA with respect to
any such securities, Cash and other property, if such liability, loss or damage
results from any negligence, misfeasance or misconduct on the part of Bank, its
officers or employees, its branches or its affiliates. Bank shall have no
liability for any losses or damages occasioned by delay in receipt of notice by
Bank of any payment, redemption, proceeding or other transaction regarding, or
of any rights exercisable by the Variable
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Account in connection with any securities, Cash or other property with respect
to which Bank has agreed to take action. Notwithstanding anything in this
Agreement to the contrary, Bank shall not be liable for any indirect,
consequential, or special damages, or for any loss resulting from, or caused by,
or resulting from the inability or failure of a local clearing and settlement
system to settle transactions for reasons beyond the control of Bank.
c. Notwithstanding the foregoing, Bank further agrees that it
will at all times give the securities or other property of a similar character
held by it hereunder the same care as it gives its own property.
d. It is understood and agreed that Bank is not under any duty
to supervise the investment of, or to advise or make any recommendation to TIAA
with respect to, the purchase or sale of any securities or other property.
e. In connection with Bank's responsibilities hereunder, it
has advised TIAA that it currently has in force, for its own protection, Bankers
Blanket Bond Insurance, and it is Bank's present intention to continue to
maintain such insurance in substantially the same form and amount. TIAA
understands that such policies would apply to certain losses under this
agreement. Bank agrees to give TIAA written notice of any reduction in the
amount, or material change in the form of such insurance, at least once a year
upon request.
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f. Bank shall have responsibility as a bailee for hire under
the law of the State of New York with respect to any Sub-Custodian of Bank.
Without limiting the generality of the foregoing, Bank will hold TIAA harmless
from and indemnify it against any loss that occurs as a result of the
negligence, misfeasance or misconduct of Bank, its officers or employees, and
any Sub-Custodian of Bank other than a Securities Depository.
4. Receipt and Disbursement of Cash
a. Bank shall open and maintain separate Deposit Accounts for
the Variable Account, in the name of the Variable Account, subject only to
actions by Bank acting pursuant to the terms of this Agreement. Bank shall hold
in such accounts, subject to the provisions hereof, all Cash received by it from
or for the Variable Account. Cash held by Bank hereunder shall be subject to
withdrawal and deposit by Bank from time to time on behalf of the Variable
Account for the purpose of consummating the purchases or sales of designated
securities upon Bank's receipt of express directions in the form of Authorized
Instructions in accordance with the provisions of Section 19.
b. Directions to withdraw Cash shall also include, but are not
limited to:
(1) the debiting or crediting of deposit accounts of
the Variable Account held by Bank, pursuant to this Agreement as of settlement
date or such other date as specified in such instructions;
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(2) the purchase of securities, options on
securities, futures contracts, options on futures contracts, or other property
for the Variable Account but only (i) upon the delivery of such securities or
other property or evidence of title for such options on securities, futures
contracts or options on futures contracts to Bank, registered in the name of
TIAA or of the nominee of Bank referred to in Section 10 hereof or in proper
form for transfer; (ii) in the case of repurchase agreements for securities
entered into between TIAA on behalf of the Variable Account and the Bank, or
another bank, or a broker-dealer which is a member of the National Association
of Securities Dealers ("NASD") against delivery of the securities either in
certificate form or through an entry crediting Bank's account at the Federal
Reserve Bank with such securities or against delivery of the receipt evidencing
purchase by the Variable Account of securities owned by Bank, another bank, or a
broker-dealer along with written evidence of the agreement by Bank, another
bank, or a broker-dealer, to repurchase such securities from the Variable
Account; or (iii) in the case of a purchase effected through a Securities
Depository in accordance with the provisions of Section 7 hereof.
(3) the payment of interest, taxes (if any),
management or supervisory fees or operating expenses including, without
limitation thereto, fees for legal, accounting and auditing services, if any;
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(4) payments in connection with the conversion,
exchange or surrender of securities owned or subscribed to by the Variable
Account held by or to be delivered to Bank; or
(5) other corporate purposes.
c. Bank is hereby authorized to endorse and collect all
checks, drafts or other orders for the payment of money received by it for the
accounts of TIAA.
5. Holding Securities
Bank shall hold in separate Custody Accounts for the Variable Account,
and physically segregated at all times from those of any other persons, firms or
corporations, or any other of TIAA's Accounts, pursuant to the provisions
hereof, all securities and other property to be held by it for the Variable
Account, except those held in a Securities Depository as described in Section 7
of this Agreement. All such securities are to be held or disposed of by Bank
for, and subject at all times to the instructions of, TIAA pursuant to the terms
of this Agreement. Bank shall have no power or authority to assign, hypothecate,
pledge or otherwise dispose of any such securities and investments, except
pursuant to the Authorized Instructions of TIAA on behalf of the Variable
Account and only through authorized instructions as set forth in Section 19 of
this Agreement.
6. Receipt and Delivery of Securities
From time to time TIAA on behalf of the Variable Account will
instruct Bank to receive or deliver securities through Authorized
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Instructions as set forth in Section 19. Such instructions may be continuing if
agreed to by the parties.
a. In accordance with this Agreement, notwithstanding such
instructions that relate to settlement date entries, Bank agrees to receive such
securities against payment or exchange as directed in any Authorized
Instructions and debit cash held in a Deposit Account on behalf of the Variable
Account only against satisfactory delivery of securities.
b. In accordance with this Agreement, notwithstanding
instructions that relate to settlement date entries, Bank agrees to transfer,
exchange, or deliver securities held by it hereunder including, but not limited
to, the following:
(1) for sales of such securities for the Variable Account upon
receipt by Bank of payment therefor;
(2) when such securities are called, redeemed or retired or
otherwise become payable;
(3) for examination by any broker selling any securities
located in the U.S. in accordance with "U.S. street delivery" custom, provided
that in any such case, Bank 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 result from Bank's negligence, misfeasance, or
misconduct;
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(4) in exchange for or upon conversion into other securities
alone or other securities and cash whether pursuant to any plan or merger,
consolidation, reorganization, recapitalization or readjustment, or otherwise;
(5) upon conversion of such securities pursuant to their terms
into other securities;
(6) upon exercise of subscription, purchase or other similar
rights represented by such securities;
(7) for the purpose of exchanging interim receipts or
temporary securities for definitive securities;
(8) upon receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Variable Account;
(9) for delivery in connection with any loans of securities
made by the Variable Account, in accordance with the provisions of Section 11
herein;
(10) for other purely ministerial exchanges; or
(11) for other corporate purposes.
As to any deliveries made by you pursuant to Items (2), (4), (5), (6),
(7) and (10), securities or cash receivable in exchange therefor shall be
deliverable to Bank.
c. Actual delivery of securities is to be made by Bank on the
contractual settlement date only upon express instructions to such effect,
provided that:
(1) the securities are on deposit in a Custody Account for the
Variable Account; and
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(2) the delivery instructions are received by Bank in timely
fashion.
d. In addition, Bank will withdraw and deliver securities
"Free of Payment" as directed in any such written instructions as set forth in
paragraph b of Section 19 herein, provided, however, that under no circumstances
are any securities to be withdrawn and delivered by Bank to any individual; such
delivery is to be made only to another custodial or other account in the name of
TIAA or the Variable Account or for TIAA's benefit.
e. Notwithstanding any provision of this Agreement to the
contrary, including but not limited to sections 6a, 6b, 6f and 7c, settlement
and payment for securities received for the account of the Variable Account and
delivery of securities maintained for the account of the Variable Account may be
effected in accordance with the customary established securities trading or
securities processing practices and procedures in the jurisdiction or market in
which the transaction occurs, including, without limitation, delivering
securities to the purchaser thereof or to a dealer therefor (or an agent for
such purchaser or dealer) against a receipt with the expectation of receiving
later payment for such securities from such purchaser or dealer.
f. Except as specifically otherwise stated in this Agreement,
in any and every case where payment for purchase of securities for the account
of the Variable Account is made by the Bank in advance of receipt of the
securities purchased in the absence of specific written instructions from TIAA
on behalf of the
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Variable Account to so pay in advance, Bank shall be liable for any loss to TIAA
for such securities to the same extent as if the securities had been received by
Bank.
g. Bank shall promptly furnish the Variable Account with
advice or notices of any receipts or deliveries of securities.
h. Bank will not be responsible for any act or omission, or
for the insolvency of any broker or agent selected by Bank to effect a
transaction for the account of the Variable Account; provided, however, Bank is
not negligent in the selection of such broker or agent.
7. Deposit of Variable Account Assets in a Securities
Depository
Bank may deposit and maintain securities owned by the Variable Account
in a Securities Depository subject to the following provisions:
a. Bank may keep the Variable Account's securities in a
Securities Depository provided that such securities are represented in an
account of Bank ("Bank's Account") in a Securities Depository which shall not
include any assets of Bank other than assets held as a fiduciary, custodian or
otherwise for customers;
b. The records of Bank will identify those securities of the
Variable Account held in a Securities Depository as being held in book-entry on
behalf of the Variable Account;
c. Bank shall pay for securities purchased for the account of
the Variable Account upon (i) receipt of advice from the Securities Depository
that such securities have been transferred to Bank's Account, and (ii) the
making of an entry on the records of
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Bank to reflect such payment and transfer for the account of the Variable
Account. Bank shall transfer securities sold for the account of the Variable
Account upon (i) receipt of advice from the Securities Depository that payment
for such securities has been transferred to Bank's Account, and (ii) the making
of an entry on the records of Bank to reflect such transfer and payment for the
account of the Variable Account.
d. Anything to the contrary in this Agreement notwithstanding,
the Bank shall be liable to TIAA for the benefit of the Variable Account for any
loss or damage to the Variable Account resulting from the use of Securities
Depositories by reason of any negligence, misfeasance or misconduct of the Bank
or any of its agents or of any of its or their employees or from failure of the
Bank or any such agent to enforce effectively such rights as it may have against
the Securities Depository; at the election of TIAA, on behalf of the Variable
Account, it shall be entitled to be subrogated to the rights of the Bank with
respect to any claim against the Securities Depository which the Bank may have
relating to the assets of the Variable Account, if the Bank (i) refuses to
enforce such claim, (ii) takes no action with respect to such claim within 60
days after the loss resulting in such claim is discovered by Bank, or (iii)
becomes insolvent, or the equivalent to an insolvency proceeding is commenced
against the Bank.
8. Segregated Account
Bank shall upon receipt of Authorized Instructions from TIAA on behalf
of the Variable Account establish and maintain a
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segregated account or accounts for and on behalf of the Variable Account, into
which account or accounts may be transferred Cash and/or securities, including
securities maintained by Bank in a Securities Depository pursuant to Section 7
hereof: (a) in accordance with the provisions of any agreement among TIAA on
behalf of the Variable Account, Bank and a broker-dealer registered under the
Exchange Act and a member of the NASD (or any futures commission merchant
registered under the Commodity Exchange Act), relating to compliance with the
rules of The Options Clearing Corporation and of any registered national
securities exchange (or the Commodity Futures Trading Commission or any
registered contract market), or of any similar organization or organizations,
regarding escrow or other arrangements in connection with transactions by the
Variable Account; (b) for purposes of segregating cash or government securities
in connection with options purchased, sold or written by the Variable Account or
commodity futures contracts or options thereon purchased or sold by the Variable
Account; (c) for the purposes of compliance by the Variable Account with the
procedures required by Investment Company Act Release No. 10666, or any
subsequent release or releases of the Commission relating to the maintenance of
segregated accounts by registered investment companies; and (d) for other
corporate purposes, but only upon receipt of Authorized Instructions from TIAA
on behalf of the Variable Account. TIAA on behalf of the Variable Account shall
be solely responsible for negotiating the terms of any agreement with a
broker-dealer or other party pursuant to this section.
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9. Income and Principal
a. Income on securities and cash held by Bank hereunder will
be credited automatically to a Deposit Account or Custody Account upon receipt
and in accordance with local market practices. Principal received in connection
with securities which mature or are redeemed shall be credited to a Deposit
Account or a Custody Account on the date such principal is received. All
collections of income or principal paid or distributed with respect to any
securities, Cash or other property shall be made at the risk of the Variable
Account, provided however, that Bank takes reasonable steps to collect such
income or principal and there is no negligence, misfeasance or misconduct on the
part of Bank.
b. Unless instructed otherwise, collections of income in
foreign currency are to be converted into United States dollars, and in
effecting such conversion Bank may use such methods or agencies as it may see
fit including its own facilities at prevailing rates. All risk and expense
incident to such collection of income regardless of the particular currency or
currencies involved is for the account of the Variable Account, and Bank shall
have no responsibility for fluctuations in exchange rates affecting such
conversion.
c. Unless and until Bank receives written instructions to the
contrary, it shall:
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(1) present for payment all coupons and other income items
held by it for the account of the Variable Account which call for payment upon
presentation and hold the cash received by it upon such payment for the
appropriate account;
(2) collect interest and cash dividends received, with notice
to TIAA, for the Variable Account;
(3) hold for the Variable Account all stock dividends, rights
and similar securities issued with respect to any securities held by Bank
hereunder, and with respect to stock dividends, it is hereby authorized to sell
any fractional interest and credit the Deposit Account with the proceeds
thereof; and
(4) with respect to any dividend reinvestment plan in which
the Variable Account participates, and as to which Bank has been so notified, it
agrees to acquire and hold hereunder the appropriate number of shares issuable
under such plan in lieu of the cash dividend, except that fractional shares may
be sold in the case of shares physically held, unless the Bank receives
appropriate instructions from TIAA to do otherwise.
d. Any dividends or interest automatically credited to the
Deposit Accounts which are not subsequently collected by Bank from the
corporation or other issuer making such payment will be reimbursed to Bank and
Bank may debit the Deposit Accounts for this purpose.
10. Registration
Securities which are eligible for deposit in Securities Depositories
may be maintained in Bank's Account with such
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Depositories. Subject to the aforesaid provision, Bank will register all
securities (except such as are in bearer form) in the name of its nominee or the
nominee of the Securities Depository, unless alternate registration instructions
are furnished by TIAA. Bank will retain and have available at all times for
inspection by regulatory authorities evidence that its nominee is registered as
required by the laws and regulations of the United States and the State of New
York, as appropriate. All such agents shall be appointed in conformance with
Section 20. TIAA on behalf of the Variable Account agrees to hold such nominee
and Bank harmless from any liability as a holder of record of such securities
and TIAA will have the same responsibility as if the securities were registered
in the name of the Variable Account. The foregoing shall not relieve Bank of its
responsibilities or liabilities hereunder.
11. Provisions Relating to Securities Lending
a. From time to time TIAA on behalf of the Variable Account
shall direct Bank by Authorized Instructions to lend securities held by Bank in
its Custodial Account to borrowers ("Borrowers"). Such securities shall be
termed the "Loaned Securities". This Section shall apply to and shall be
controlling solely with respect to such Loaned Securities and lending services
relating thereto. Loaned Securities which are returned by the Borrower to Bank
shall upon receipt thereof constitute securities and property held by Bank to
which the other provisions of this Agreement shall be applicable unless
otherwise provided herein.
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b. From time to time TIAA on behalf of the Variable Account
will provide Bank with Authorized Instructions regarding the delivery or return
of Loaned Securities. In this connection, Bank is authorized and directed, all
in accordance with such instructions to promptly:
(1) Deliver the Loaned Securities to the Borrower for the
Variable Account, against receipt by Bank of collateral in respect of such
Loaned Securities (the "Collateral"), in the form and amount specified in such
instructions. Bank shall promptly place the specified Collateral in a Deposit or
Custody Account and promptly notify TIAA on behalf of the Variable Account of
such transaction.
(2) Receive Loaned Securities being returned by Borrower in
the form and amount specified in the Authorized Instructions. Upon satisfactory
delivery of such Loaned Securities, Bank shall debit the defined Collateral from
TIAA's Deposit Account in accordance with such instructions and pay or redeliver
the specified Collateral to Borrower and promptly notify TIAA on behalf of the
Variable Account of such transaction.
(3) Release to Borrower any excess Collateral or receive
Collateral from Borrower as specified in instructions issued by TIAA on behalf
of the Variable Account. Bank shall promptly transmit the specified Collateral
to be released, or accept delivery and transmit Collateral received to a Deposit
Account, as the case may be, and notify TIAA on behalf of the Variable Account
of such transmittal or receipt. Bank shall debit
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or credit the defined Collateral from the Deposit Account, as
appropriate.
c. Where Bank has received Authorized Instructions from TIAA
indicating that TIAA has previously received adequate Collateral covering
contemplated loans, Bank is authorized to deliver Loaned Securities "Free of
Payment" upon express direction from TIAA with respect to designated Loaned
Securities. A list of authorized Borrowers who are eligible to receive such
Loaned Securities Free of Payment will be signed by any two Authorized Officers,
with the title of Chairman, President, Executive Vice President and Treasurer,
or by any one of these officers together with any TIAA officers with the title
of Senior Vice President or Vice President, in accordance with paragraph b. of
Section 19.
d. TIAA on behalf of the Variable Account shall also provide
Bank with written instructions regarding Loaned Securities for which TIAA has
previously received adequate Collateral and their delivery "Free of Payment" to
designated Borrowers in accordance with paragraph c. hereof or the return of
Loaned Securities. Bank shall be authorized, in accordance with such written
instructions, to:
(1) Deliver the Loaned Securities, "Free of Payment" to the
listed Borrower, and
(2) Receive Loaned Securities specified in such instructions.
Bank shall promptly advise TIAA on behalf of the Variable Account of
the completion of any such specified transaction.
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e. Bank agrees to receive from the Borrower any income,
dividends, and/or distributions made by the issuer with respect to the Loaned
Securities, and to credit the Deposit Account or Custody Account when such
amounts and properties are received from the Borrower in accordance with the
provisions of Section 9.
f. Bank shall be responsible for the Collateral and Loaned
Securities in its possession and for the handling and servicing of such property
in accordance with written instructions. Bank is hereby designated to acquire
possession of Collateral on behalf of the Variable Account and to act as bailee
or financial intermediary (as defined in the Uniform Commercial Code of the
State of New York, as amended the "UCC"), as the case may be, to enable TIAA on
behalf of the Variable Account to perfect and maintain perfection of a security
interest in such Collateral, pursuant to the provisions of the UCC or other
applicable laws, as amended from time to time. It is understood that Bank shall
not be responsible for obtaining or perfecting TIAA's security interest in the
Collateral other than possessing and handling the Collateral in accordance with
the preceding sentence and the instructions of TIAA regarding delivery and
receipt, and shall not be responsible to advise TIAA of the steps necessary to
obtain or perfect such interest or for effecting any statutory filing, unless
mutually agreed upon at such time. Under no circumstances and in no event shall
Bank have or be charged with any responsibility or liability for (i) the credit
worthiness or continued credit worthiness of any Borrower, (ii) the adequacy or
value of any Collateral in
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connection with any loan of securities, (iii) the failure of the Borrower to pay
any income, dividend and/or distribution made by the issuer on the Loaned
Securities, or (iv) any act taken by it in accordance with the direction of the
Variable Account, or omitted by it in the absence of such direction.
g. Bank shall report as assets of its Custody Account property
which is Loaned Securities that have previously been delivered to Borrowers and
hence are not in Bank's possession. Bank shall have no responsibility or
liability whatsoever with respect to such Loaned Securities and shall perform no
services with respect thereto, except as specifically set forth herein.
h. Bank shall provide to TIAA a Report of Assets Held which
shall include all Loaned Securities (whether or not such securities are in the
possession of Borrowers) designated in such report to indicate that the same is
reported on a memorandum entry basis or on such other basis as shall be mutually
agreed upon. Bank shall also provide to TIAA all information and data specified
in paragraphs a., b., c. and f. of Section 14, and such further information
concerning the Loaned Securities and Collateral as TIAA shall reasonably
request, so that TIAA may properly account for and segregate such property. Bank
shall furnish TIAA with all such other reports and information as TIAA shall
reasonably request. Bank shall furnish TIAA with all reports and information
pursuant to this Amendment within a reasonable time after request therefor.
12. Voting and Other Action
No person may vote (other than pursuant to Authorized Instructions) any
securities held by Bank hereunder. Bank will
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promptly transmit to TIAA, or direct to be transmitted to TIAA, all notices,
proxies and proxy soliciting materials with respect to securities held by it
hereunder, which proxies will be executed by the registered holder thereof if
registered otherwise than in the name of TIAA or the Variable Account, but
without indicating the manner in which such proxies are to be voted.
Bank will promptly transmit to TIAA all written information (including,
without limitation, pendency of calls and maturities of securities and
expirations of rights in connection therewith) received by it from the issuers
of securities or other property held by it hereunder. With respect to tender or
exchange offers, Bank will promptly transmit to TIAA all written information
received by it from issuers of the securities or other property whose tender or
exchange is sought and from the party (or its agents) making the tender or
exchange offer.
13. Fees and Expenses
Bank will be compensated for the services rendered under this Agreement
and reimbursed for out-of-pocket expenses through arrangements negotiated
between TIAA on behalf of the Variable Account and Bank from time to time. Bank
will also be compensated for reasonable counsel fees incurred in the performance
of its duties hereunder, provided, however, that Bank gives TIAA written notice
in advance of the incurrence of such fees.
TIAA acknowledges its responsibility as a principal for all of its
obligations to Bank arising under or in connection with this Agreement.
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14. Records, Affidavits and Reports
With respect to the securities and other property held by Bank
hereunder, Bank agrees:
a. To maintain records sufficient to verify information TIAA
is required to report in Schedule D of the Annual Statement Blank of the
Insurance Department of the State of New York ("Insurance Department") as
amended from time to time, which records will consist of a list of such
securities showing a complete description of each issue, including the number of
shares and par value of securities so held at the end of such month and such
other information as may be agreed to by Bank and required by such report or any
other report required by the Insurance Department;
b. To maintain records regarding transactions and related
activities described in Sections 4, 5, 6, 7, 8, 9, 10 and 11 sufficient to
verify the accuracy of regular monthly and other reports and income received on
such securities and other property;
c. To maintain records sufficient to verify information
relating to Cash held by Bank;
d. To create, maintain and preserve all reports and records
relating to Bank's activities and obligations listed in Exhibit B attached
hereto, as such Exhibit may be amended from time to time under this Agreement as
provided for in this Section in such manner as will meet the requirements of the
1940 Act, including Section 31 thereof and Rules 31a-1 and 31a-2 and the Bank
agrees that such reports and records are the property of the
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Variable Account and will be surrendered to the Variable Account promptly upon
request;
e. To permit examination of such books and records as provided
for in this Section at any time or from time to time during business hours as
provided for in Section 16 by representatives or designees of the Commission,
and to promptly furnish to the Commission or its designees true, correct,
complete and current hard copy of any or all or any part of such books and
records;
f. To furnish the Variable Account with the appropriate
affidavit(s) in such form acceptable to Bank as may be submitted to Bank by TIAA
on behalf of the Variable Account from time to time which is acceptable to the
Insurance Department or any other state or federal governmental agency having
jurisdiction over TIAA, in order for the securities and other property referred
to in such affidavit(s) to be recognized as admitted assets of TIAA and in order
for TIAA to comply with any other requirements of such Department or agencies;
g. To furnish upon request the Variable Account with any
report obtained by Bank on a Securities Depository's system of internal
accounting control; and to furnish upon request, the Variable Account with such
reports on Bank's system of internal accounting control as TIAA on behalf of the
Variable Account may reasonably require;
h. To furnish all such other reports and information as shall
be reasonably requested by TIAA on behalf of the Variable
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Account relating to all property held by Bank on the Variable Account's behalf
pursuant to the terms of this Agreement; and
i. That all such information, records, reports, and affidavits
maintained or held by Bank pursuant to this Section remain the property of
Variable Account and copies of all such information which are reasonably
available will be surrendered to Variable Account within a reasonable time after
request therefor.
j. The specific records, reports and affidavits required in a.
through i. above shall be set forth in a separate document which may be modified
from time to time by agreement of the parties to this Agreement.
15. Reconciliation of Statements or Advice TIAA agrees that it will
reconcile statements and advice sent
by mail or electronic media and that all such statements and advice will be
considered final sixty days from the date of dispatch unless TIAA has notified
Bank orally or in writing regarding any questions, problems or objections.
16. Access
a. During the course of Bank's regular banking hours, any duly
authorized officer, employee or agent of TIAA, any independent accountants
selected by TIAA, any member of the Insurance Department, and any representative
or designee of the Commission or other governmental agencies having jurisdiction
over TIAA, shall be entitled to examine, on Bank's premises, securities and
records of all securities, Cash and other property held by Bank, its branches,
or other entities hereunder and its books and records pertaining to its actions
under this Agreement, but only
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upon furnishing Bank with one day notice of such examination signed by a duly
authorized officer of TIAA. Bank's books and records used in connection with
TIAA's indirect participation in a depository or other entities, to the extent
that they relate to depository, custodial or other services rendered to TIAA by
Bank, pursuant to this Agreement, shall at all times during Bank's regular
business hours be open to inspection by duly authorized employees or agents of
TIAA, or governmental agencies having jurisdiction over TIAA, but only upon
furnishing Bank with one day's notice to that effect as specified in the
preceding sentence.
b. Upon receiving a request from TIAA, Bank agrees that it
will to the extent consistent with its Agreement with each Subcustodian take
such steps as are within its power to enable any of the aforementioned officers,
accountants, employees, agents and members of TIAA, the Insurance Department,
the Commission or other governmental agencies having jurisdiction over TIAA, to
inspect and examine securities and other property of TIAA and books and records
of such property not located on Bank's premises, which property and records are
held on TIAA's behalf by its branches or other entities pursuant to this
Agreement.
17. Exemption from Income Tax
a. TIAA is exempt from the payment of United States income
tax. Documentation evidencing TIAA's tax exempt status has heretofore been
furnished by TIAA to the Bank. Bank is hereby authorized and empowered as TIAA's
agent to sign in its name any certificate of ownership or other certificate
which is or may be
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required by any regulations of the Internal Revenue Service, the laws of any
state, or other authority of the United States.
b. To enable Bank properly to execute the certificate
described in a. above, TIAA hereby certifies that TIAA is a corporation duly
organized and existing under the laws of the State of New York, having its
principal place of business in the City of New York. TIAA's Employer
Identification No. is 00-0000000.
18. Amendments
No amendment or change to this Agreement shall be authorized by TIAA on
behalf of the Variable Account without the written consent signed by an officer
with the title of either Chairman or President and any officer with the title of
Executive Vice President or Treasurer and accepted in writing by any Vice
President or Managing Director of Bank.
19. Authorization
a. Except as otherwise provided for in this Agreement, written
instructions by TIAA hereunder shall be signed by any two of its Authorized
Officers specified in a separate list for this purpose which will be furnished
to Bank from time to time signed by the Treasurer or any Associate Treasurer or
Assistant Treasurer and by the Secretary or any Assistant Secretary as certified
under the corporate seal of TIAA. Such instructions are referred to herein as
"Authorized Instructions". Upon receipt of written instructions pursuant to
paragraph b., below accompanied by a detailed description of procedures approved
by such instructions, Authorized Instructions may include communications
effected directly between electro-mechanical or electronic devices provided that
TIAA and
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Bank are satisfied that such procedures afford adequate safeguards for the
Variable Account's assets. Such satisfaction shall be evidenced when TIAA has
given instructions and Bank has acted upon such instructions given by such
device.
b. As provided for in Sections 11.c. and 19.a. herein or in
connection with the delivery of securities or other property "Free of Payment,"
written instructions shall be acted upon only if received in writing manually
signed by any two of such Authorized Officers with the title Chairman,
President, Executive Vice President, or Treasurer, or by any one of those
officers together with any TIAA officer with the title Senior Vice President or
Vice President.
c. Bank shall not be liable for any action taken in good faith
upon Authorized Instructions or upon written instructions pursuant to b., above,
and may rely on such documents that it in good faith believes to be validly
executed. Bank may assume, in the absence of written notice to the contrary from
TIAA, that the authority of each person designated an Authorized Officer
pursuant to this section has not been revoked.
20. Appointment of Agents
The Bank 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 1940 Act, as amended, to act as a custodian, as its agent to carry out such
of the provisions of this Agreement as the Bank may from time to time direct;
provided, however, that the appointment of any agent shall not relieve the Bank
of its responsibilities or liabilities hereunder.
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21. Notices
a. Confirmations and advices of all types relating to the
securities, cash or other property held by Bank hereunder will be provided to
the particular divisions of TIAA on behalf of the Variable Account indicated in
a separate listing which the treasurer will furnish to Bank from time to time.
b. Written notices hereunder shall be hand-delivered,
delivered by overnight courier or mailed first class, addressed, if to Bank, at
00 Xxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000, or if to TIAA, at 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Treasurer. Written notice of (i) termination of
this Agreement, (ii) termination of Bank's participation in DTC or any other
securities depository, (iii) changes in Bank's designation of any of its
branches or Sub-Custodians having custody of any of the Variable Account's
assets under this Agreement, or (iv) changes in Bank's insurance coverage, shall
be sent by hand or overnight courier; provided, however, that any such notice
pursuant hereto shall not constitute approval by TIAA of any such termination,
change or designation nor shall such notice relieve Bank of its responsibilities
hereunder.
c. Any notice so addressed, delivered or mailed shall be
deemed to be given upon receipt by the other party.
22. Termination or Assignment
This Agreement may be terminated by either party on sixty days' written
notice sent by certified mail. Upon any termination of this Agreement, upon
appointment of a successor to Bank or if a
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vote of the participants of TIAA to dissolve or to function without a custodian
of its cash, securities or other property has occurred, Bank shall deliver Cash,
securities or other property to a bank or trust company selected by TIAA on
behalf of the Variable Account having an aggregate capital, surplus and
undivided profits, as shown by its last published report of not less than
twenty-five million dollars ($25,000,000) as a custodian for TIAA to be held
under a custodial agreement with that institution; provided, however, that Bank
shall not be required to make any such delivery or payment until full payment
shall have been made by TIAA on behalf of the Variable Account of all
liabilities constituting a charge on or against the properties then held by Bank
or on or against it, and until full payment shall have been made to Bank of all
fees, compensation, costs and expenses, subject to the provisions of Section 13
of this Agreement.
This Agreement may not be assigned by Bank without the consent of TIAA,
authorized or approved by a resolution of TIAA's trustees.
23. Effect of Headings
The Section headings herein are for convenience only and shall not
affect the construction thereof.
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24. Governing Law
This Agreement shall be governed by and construed in accordance with
the law of the State of New York.
IN WITNESS WHEREOF, the undersigned have signed this Agreement as of
the date first written above.
TEACHERS INSURANCE AND ANNUITY ASSOCIATION,
ON BEHALF OF EACH VARIABLE ACCOUNT LISTED
ON EXHIBIT A
BY: /s/ Xxxxxx X. Xxxxx
-----------------------------
Xxxxxx X. Xxxxx
President
BY: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------
Xxxxxxx X. Xxxxxxx
Vice President and Treasurer
BANKERS TRUST COMPANY
BY: /s/ Xxxxxx X. Xxxxx
-----------------------------
Xxxxxx X. Xxxxx, V.P.
BY: /s/ Xxxxx X. Xxxxx
-----------------------------
Xxxxx X. Xxxxx, V.P.
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EXHIBIT A
Investment portfolios of TIAA Separate Account VA-1 included
within this Agreement (the Variable Accounts):
1. Stock Index Fund
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EXHIBIT B
Information and records the bank will provide, maintain, and
preserve for each investment portfolio of the TIAA Separate Account VA-1 for
which you may be appointed custodian, and to provide such information to TIAA,
and/or the appropriate regulatory authorities:
INFORMATION AND RECORD REQUIREMENT FREQUENCY OF DELIVERY
1. Statement of Holdings a. Daily, Monthly
2. Securities in lien position b. Monthly
3. Location of securities c. Monthly
4. Securities out for transfer d. Upon request
5. Actual securities settlement date e. Upon request
6. Certification number (if applicable) f. Upon request
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