CUSTODIAL SERVICES AGREEMENT
Xxxxxx Guaranty Trust Company March 3, 1988
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
You are hereby authorized and requested to open one or more custodial accounts
in the name of College Retirement Equities Fund ("CREF") or in your name or in
the name of your branches on behalf of CREF. This Agreement defines the nature
and scope of the services to be provided and your responsibility in connection
with these custodial accounts.
It is hereby agreed that all securities or other property now or hereinafter
held by you hereunder are held for the custodial account of CREF and are to be
maintained and disposed of by you only for us in accordance with the terms and
conditions set forth in this Agreement. As used herein, unless specifically
instructed in writing to the contrary, the phrase "held by you hereunder" shall
also include (1) your authority to deposit all or any part of such property in a
centralized depository, and (2) the deposit of securities or other property in a
custody account maintained by Xxxxxx Guaranty Trust Company wherever located.
For purposes of this Agreement, a depository shall mean the system for the
central handling of securities of any particular class or series of any issuer
deposited therein which may be treated as part of a fungible bulk and may be
transferred by bookkeeping entry without physical delivery of such securities.
1. SAFEKEEPING
You will be responsible for the safekeeping, handling, servicing and disposition
of all securities or other property of CREF held by you hereunder including,
without limitation, any and all of CREF's funds (including cash and monies
whether in United States or foreign denominated currencies, hereinafter termed
the "Funds") deposited by CREF with you in accounts in CREF's name, your name or
that of your nominees located at your head office or branch offices.
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You agree to be liable and to indemnify and hold CREF harmless for any and all
liability of loss or damage to CREF with respect to any such securities, Funds
and other property, if such liability, loss or damage results from any
negligence, misfeasance, or misconduct on the part of you, your officers or
employees, your branches or your affiliates.
Notwithstanding the foregoing, you further agree that you will at all times (1)
give the securities or other property held by you hereunder the same care you
give your own property of a similar nature and (2), with respect to the
maintenance of the indicia of ownership of such securities or other property,
comply with and remain subject to Section 404(b) of the Employee Retirement
Income Security Act of 1974, and all applicable provisions of the regulations on
the date this agreement shall become effective.
It is understood and agreed that you are not under any duty to supervise the
investment of, or to advise or make any recommendation to CREF with respect to
the purchase or sale of any securities.
In connection with your responsibilities hereunder, you have advised us that you
currently have in force, for your own protection, Bankers Blanket Bond Insurance
and you will continue to maintain such insurance in substantially the same form
and amount. We understand that such insurance would be available to cover
certain losses with respect to securities held by you hereunder. You agree to
give us written notice of any reduction in the amount, or material change in the
form of such insurance at least once a year or upon request.
Promptly upon receiving a request therefore from CREF (and in any event no later
than two (2) days in the case of Funds, and ten (10) days in the case of all
other properties, after such request has been received by you), you agree to
return, refund and repay in full, all Funds or other property of CREF held by
you, your branches or any other entity pursuant to the terms of this Agreement,
free of liens, security interests, rights, charges or claims of any kind,
including, without limitation, any rights of offset, setoff or discharge
relating to any such properties.
Securities, Funds and other property are permitted to be held by a) Xxxxxx
Guaranty Trust Company at any of its offices wherever located, b) domestic
securities depositories selected by Xxxxxx Guaranty Trust Company with the
approval of CREF and c) foreign securities depositories or clearing agencies
(singly a "Foreign Securities System") selected by Xxxxxx Guaranty Trust Company
with the approval of CREF.
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Such Foreign Securities Systems shall be deemed to be Subcustodian of Xxxxxx
Guaranty Trust Company and securities, Funds and other property held by a
Foreign Securities System shall be considered for all purposes of this Agreement
as being held directly by Xxxxxx Guaranty Trust Company.
The Bank shall have responsibility as a bailee for hire under the law of the
State of New York with respect to any Foreign Securities System acting as a
subcustodian of the Bank. Without limiting the generality of the foregoing, the
Bank will hold CREF harmless from and indemnify it against any loss that occurs
as a result of the negligence or willful misconduct of the Bank, its officers or
employees, and any of the Foreign Securities Systems acting as the subcustodians
of the Bank.
The Bank's responsibility with respect to any securities, Funds and other
property held by a domestic securities depository or any Foreign Securities
System is limited to the failure on the part of the Bank to exercise reasonable
care in the selection or retention of such domestic securities depository or
Foreign Securities System and the Bank will hold the CREF harmless from and
indemnify it against any loss that occurs as a result of the Bank's failure to
exercise such reasonable care.
2. SERVICING
A. WITHDRAWAL & DEPOSIT OF FUNDS. All Funds held by you hereunder shall be
subject to withdrawal and deposit by you from time to time on behalf of CREF for
the purpose of consummating the purchases or sales, as the case may be, of
designated securities, solely upon your receipt of express directions from duly
authorized officers of CREF in accordance with the provisions of Section 6
hereof. Such directions shall include, but shall not be limited to: (1) the
execution and delivery of foreign currency contracts on behalf of CREF, (2) the
debiting or crediting of currency accounts (United States or foreign) of CREF
held by you, your branches or any other entities pursuant to this Agreement as
of settlement date or such other date as specified in such instructions, and (3)
the prompt return to CREF of any or all Funds or property held by you hereunder.
B. ACQUISITIONS AND DISPOSITIONS OF SECURITIES. From time to time CREF will
instruct you to receive or deliver securities on its behalf through properly
authorized instructions as set forth in Section 6 herein. In accordance with
this Agreement, notwithstanding such instructions that relate to settlement date
entries, you agree that you will:
(a) receive such securities against payment or exchange, as
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directed in any authorized instruction and debit Funds held by
you on our behalf only against satisfactory delivery of
securities;
(b) assign, sell, tender, exchange or otherwise dispose of such
securities, only upon receipt of payment or exchange, or your
guarantee of payment or exchange, as directed by a properly
authorized instruction, and credit our checking account
accordingly. Actual delivery of securities is to be made by
you on the contractual settlement date only upon express
instructions to such effect, PROVIDED that:
(1) The securities are on deposit in our account,
(2) our delivery instructions are received by you in timely
fashion, and
(c) promptly furnish us with advices or notices of any receives or
delivers of securities, and identify by book entry or
otherwise as a quantity of securities which constitute or are
part of a fungible bulk of securities either registered in the
name of your nominee or your branch's nominee as shown on your
account on the books of a depository;
(d) exchange securities where the exchange is purely ministerial.
When instructed to deliver securities against payment, we understand that
delivery will actually be made before receipt of payment in accordance with
generally accepted market practice. We agree that we bear the risk that the
recipient of the securities may fail to make payment, return the securities or
hold the securities or the proceeds of their sale in trust for us or for Xxxxxx
as our agent.
C. INCOME AND PRINCIPAL. Income on securities and Funds held by you hereunder
will be credited automatically to our checking account upon notification that
such income has become due and payable. Principal received in connection with
securities which mature or are redeemed shall be credited to our checking
account on the date such principal is received.
Unless instructed otherwise, collections of income in foreign currency are to be
converted into United States dollars and in effecting such conversion you may
use such methods or agencies as you may see fit including your own facilities at
prevailing rates. All risk and expense incident to such collection and
conversion is for the account of the undersigned, and you shall
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have no responsibility for fluctuations in exchange rates affecting such
conversion.
You shall also acquire and hold hereunder all stock dividends, rights and
similar securities issued with respect to any securities held by you hereunder.
With respect to any dividend reinvestment plan in which CREF participates, and
as to which you have been so notified, you agree to acquire and hold hereunder
the appropriate number of shares issuable under such plan in lieu of the cash
dividend. With respect to stock dividends, you are hereby authorized to sell any
fractional interest and to credit our checking account with the proceeds
thereof.
D. REGISTRATION. Securities which are eligible for deposit in centralized
depositories may be maintained in your account with them or your branch's
nominee. Subject to the aforesaid provision, you will register all securities
(except such as are in bearer form) in the name of your nominee or your branch's
nominee, unless alternate registration instructions are furnished by us. You
will retain and have available at all times for inspection by regulatory
authorities evidence that your nominee is registered as required by the laws and
regulations of the United States and the State of New York, as appropriate.
3. VOTING AND OTHER ACTION
No person may vote (other than pursuant to written instruction) any securities
held by you hereunder. You will promptly transmit to us, or direct to be
transmitted to us, all notices, proxies and proxy soliciting materials with
respect to securities held by you hereunder, which proxies will be executed by
the registered holder thereof if registered otherwise than in the name of CREF,
but without indicating the manner which such proxies are to be voted.
You will promptly transmit to us all written information (including, without
limitation, pendency of calls and maturities of securities and expirations of
rights in connection therewith) received by you from the issuers of securities
held by you hereunder. With respect to tender or exchange offers, you will
promptly transmit to us all written information received by you from issuers of
the securities whose tender or exchange is sought and from the party (or his
agents) making the tender or exchange offer.
4. RECORDS, AFFIDAVITS AND REPORTS
With respect to the securities and other property held by you hereunder, you
agree:
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A. To maintain records sufficient to verify information we are required to
report in Schedule D of the Annual Statement Blank of the Insurance Department
of the State of New York 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 required by such report
or any other report required by the Insurance Department of the State of New
York;
B. To maintain records in new York regarding transactions and related activities
described in "Servicing" Section 2 sufficient to verify the accuracy of regular
monthly reports and income received on such securities and other property;
C. To maintain records sufficient to verify information relating to Funds held
by you, including but not limited to (1) the purchase of foreign currency
contracts, (2) the maintenance of foreign currency accounts on behalf of CREF in
the possession and custody of you, your branches or other entities located
outside the United States, and (3) any reports submitted to CREF relating to its
Funds;
D. To furnish us with the appropriate affidavit(s) in the form of Exhibit A,
attached hereto or in such other form as may be submitted to you by us from time
to time which is acceptable to the Insurance Department of the State of New York
or any other state or federal governmental agency having jurisdiction over CREF,
in order for the securities and other property referred to in such affidavit(s)
to be recognized as admitted assets of CREF and in order for CREF to comply with
any other requirements of such Department or agencies;
E. To furnish us with any report obtained by you on a depository's system of
internal accounting control; and to furnish us with such reports on your system
of internal accounting control as we may reasonably require;
F. To furnish with all such other reports and information as shall be reasonably
requested by us relating to all property held by you on our behalf pursuant to
the terms of this Agreement; and
G. To furnish all such information, reports and affidavits pursuant to this
Section 4 within a reasonable time after request therefor.
5. ACCESS
During the course of your regular banking hours, and duly
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authorized officer, employee or agent of CREF, any independent accountants
selected by CREF, and any member of the Insurance Department of the State of
New York or governmental agencies having jurisdiction over CREF, shall be
entitled to examine, on your premises, securities and records of all Funds and
property held by you, your branches, or other entities hereunder and your books
and records pertaining to your actions under this Agreement, but only upon
furnishing you with written notice of such examination signed by a duly
authorized officer of CREF. Your books and records used in connection with our
indirect participation in a depository or other entities, to the extent that
they relate to depository, custodial or other services rendered to us by you,
pursuant to this Agreement, shall at all times during your regular business
hours be open to inspection by duly authorized employees or agents of CREF or
governmental agencies having jurisdiction over CREF, but only upon furnishing
you with written notice to that effect as specified in the preceding sentence.
Upon receiving a request from CREF, you agree that you will use your best
efforts to enable any of the aforementioned officers, accountants, employees,
agents and members of CREF, the Insurance Department of the State of New York or
other governmental agencies having jurisdiction over CREF, to inspect and
examine securities and other property of CREF and books and records of such
property not located on your premises, which property and records are held on
CREF's behalf by your branches or other entities pursuant to this Agreement.
6. AUTHORIZATION
A. Except as otherwise provided in this Agreement, written instructions by CREF
hereunder shall be signed by any two of its Authorized Officers specified in a
separate list for this purpose which will be furnished to you from time to time
signed by the treasurer or any assistant treasurer and by the secretary or an
assistant secretary as certified under the corporate seal of CREF.
B. Instructions for the withdrawal of CREF owned securities "free of payment"
shall be acted upon by you 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
CREF officer with the title senior vice president or vice president.
7. FEES AND EXPENSES
You will be compensated for the services rendered under this
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Agreement and reimbursed for out-of-pocket expenses through arrangements
negotiated between us from time to time.
8. EXEMPTION FROM INCOME TAX
CREF is exempt from the payment of United States income tax. Upon receipt of
documentation evidencing CREF's tax exempt status, you are hereby authorized and
empowered, as CREF's agent, in its name, to sign any certificate of ownership or
other certificate which is or may be required by any regulations of the Internal
Revenue Service or other authority of the United States.
To enable you properly to execute such certificate, we hereby certify that CREF
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. CREF's
Employer Identification No. is 000000000.
Should there be any change in the information furnished you herein, we will
inform you promptly. If at any time CREF's status should be such as to require
the withholding of any income tax from payments received by you, you are hereby
authorized and empowered to make whatever deductions are then required by
applicable laws or regulations and are requested to notify CREF accordingly.
9. AMENDMENTS
No amendment or change to this agreement shall be authorized by CREF without the
written consent signed by either the chairman or president and by any executive
vice president or the treasurer and accepted in writing by Xxxxxx Guaranty Trust
Company.
10. NOTICES
Official receipts and advices of all types relating to the securities, Funds or
other property held by you hereunder will be prepared by you, in duplicate, and
forwarded to the particular divisions of CREF indicated in a separate listing
which the treasurer will furnish you from time to time.
Written notices hereunder shall be hand-delivered or mailed first class,
addressed (a) if to you, at your address set forth at the beginning of this
Agreement or (b) if to CREF at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Treasurer. Written notice of (1) termination of this Agreement, (2)
termination of your participation in DTC or any other depository, (3) changes in
your designation of any of your branches or other entities having custody of any
of CREF's property under this Agreement, or (4)
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changes in your insurance coverage, shall be sent by certified mail; provided,
however, that any such notice pursuant hereto shall not constitute approval by
CREF of any such termination, change or designation nor shall such notice
relieve you of your responsibilities hereunder.
Any notice so addressed, hand delivered and mailed shall be deemed to be given
on whichever of the following dates shall first occur: (i) the date of actual
receipt thereof, (ii) the fifth day next following the date mailed, or (iii) if
the substance thereof is communicated by hand delivery or certified mail, the
date so delivered or mailed.
11. TERMINATION
Either party may terminate this Agreement by giving the other party sixty (60)
days written notice of termination, provided, however, that you shall not
terminate this Agreement without your prior delivery to us of all Funds,
securities and other property of CREF held by you on our behalf pursuant to this
Agreement.
12. EFFECT OF HEADINGS
The Section headings herein are for convenience only and shall not affect the
construction hereof.
13. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the law of
the State of New York.
This Agreement shall become effective upon receipt by CREF of a copy of this
letter signed by you indicating your acceptance thereof.
Very truly yours,
COLLEGE RETIREMENT EQUITIES FUND
BY:________________________
Xxxxxxx X. Xxxxxxx
Treasurer
BY:________________________
Xxxxxx X. Xxxxxx
President
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Accepted and Agreed:
XXXXXX GUARANTY TRUST COMPANY
BY:________________________
Xxxxx Xxxx Xxx-Xxxxx
Vice President
EXHIBIT A
CUSTODIAN AFFIDAVIT
STATE OF )
)SS.;
COUNTY OF )
__________________________________, being duly sworn deposes and says that he is
___________________________of the Xxxxxx Guaranty Trust Company a banking
corporation organized under and pursuant to the laws of
the___________________________ with principal place of business
at_________________________, (hereinafter called the "Bank");
That his duties involve supervision of activities of the Bank as custodian and
records relating thereto;
That the Bank is custodian for certain securities of College Retirement Equities
Fund having a place of business at 000 Xxxxx Xxxxxx, Xxx Xxxx, X.X. 00000
(hereinafter called the "Company") pursuant to the Custodial Services Agreement
dated as of__________________, 1987 (hereinafter the "Agreement") between the
Bank and the Company;
That the schedule attached hereto is a true and complete statement of securities
which were in the custody of the Bank for the account of the Company as of the
close of business on_________________________; that unless otherwise indicated
on the schedule, the next maturing and all subsequent coupons were then either
attached to coupon bonds or in the process of collection; and that, unless
otherwise shown on the schedule, all such securities were in bearer form or in
registered form in the name of the Company or its nominee, or a nominee of the
Bank or its agent's nominee, or were in the process of being registered in such
form;
That the Bank as custodian has the responsibility for the safekeeping of such
securities as that responsibility is specifically set forth in the Agreement
between the Bank as custodian and the Company; and
That, to the best of his knowledge and belief, unless otherwise shown on the
schedule, said securities were the property of said Company and were free of all
liens, claims, or encumbrances whatsoever.
Subscribed and sworn to
before me this__________
day of__________________ _________________________________ (L.S.)
