CUSTODY AGREEMENT
(U.S. SECURITIES)
AGREEMENT, dated as of December 13, 1996 between First Golden
American Life Insurance Company of New York Separate Account NY-B
("Customer") and The Bank of New York ("Custodian").
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words shall have
the meanings set forth below:
1. "Authorized Person shall be any person, whether or not an
officer or employee of Customer, duly authorized by Customer to give
Oral and/or Written Instructions on behalf of Customer, such persons to
be designated in a Certificate of Authorized Persons which contains a
specimen signature of such person.
2. "BNY Affiliate" shall mean any office, branch or subsidiary
of The Bank of New York Company, Inc.
3. "Book-Entry System" shall mean the Federal Reserve/Treasury
book-entry system for receiving and delivering securities, its
successors and nominees.
4. "Business Day" shall mean any day on which Custodian, Book-
Entry System and relevant Depositories are open for business.
5. "Depository" shall include the Depository Trust Company, the
Participants Trust Company and any other securities depository or
clearing agency (and their respective successors and nominees)
registered with the Securities and Exchange Commission or otherwise
authorized to act as a securities depository or clearing agency.
6. "Oral Instructions" shall mean verbal instructions received
by Custodian from an Authorized Person or from a person reasonably
believed by Custodian to be an Authorized Person.
7. "U.S. Securities" shall include, without limitation,
securities held in the Book-Entry System or at a Depository, common
stock and other equity securities, bonds debentures and other debt
securities, notes mortgages or other obligations, and any instruments
representing rights to receive, purchase, or subscribe for the same, or
representing any other rights or interests therein.
8. "Written Instructions" shall mean any notices, instructions
or other instruments in writing received by Custodian from an
Authorized Person or from a person reasonably believed by Custodian to
be an Authorized Person by letter, telex, facsimile transmission,
Custodian's on-line communication system, or any other method whereby
Custodians able to verify with a reasonable degree of certainty the
identity of the sender of such communications or the sender is required
to provide a password or other identification code.
ARTICLE II
APPOINTMENT OR CUSTODIAN; ACCOUNTS
REPRESENTATIONS AND WARRANTIES
1. Customer hereby appoints Custodian as custodian of all U.S.
Securities and cash at any time delivered to Custodian during the term
of this Agreement,and authorizes Custodian to hold U.S. Securities in
registered from in its name or the name of its nominees. Custodian
hereby accepts such appointment and agrees to establish and maintain
one or more securities accounts and cash accounts in the name of
Customer (collectively, the "Account") in which it will hold U.S.
Securities and cash as provided herein.
2. Customer hereby represents and warrants, which
representations and warranties shall be continuing and shall be deemed
to be reaffirmed upon each Oral or Written Instruction given by
Customer, that
(a) Customer is duly organized and existing under the laws
of the jurisdiction of its organization, with full power to carry on
its business as now conducted, to enter into this Agreement and to
perform its obligations hereunder;
(b) This Agreement has been duly authorized, executed and
delivered by Customer, constitutes a valid and legally binding
obligation of Customer, enforceable in accordance with its terms, and
no statute, regulation, rule, order, judgment or contract binding on
Customer prohibits Customer's execution or performance of this
Agreement; and
(c) Either Customer owns the U.S. Securities in the Account
free and clear of all liens, claims, security interests and
encumbrances (except those granted herein) or, if the U.S. Securities
are owned beneficially by others, Customer has the right to pledge such
U.S. Securities to the extent necessary to secure Customer's
obligations hereunder, free of any right of redemption or prior claim
by the beneficial owner. Custodian's security interest pursuant to
Article V hereof shall be a first lien and security interest subject to
no setoffs, counterclaims or other liens prior to or on a parity with
it in favor of any other party other than specific liens granted
preferred status by statute), and Customer shall take any and all
additional steps which Custodian requires to assure itself of such
priority and status, including notifying third parties or obtaining
their consent to, Custodian's security interest.
ARTICLE III
CUSTODY AND RELATED SERVICES
1. Subject to the terms hereof, Customer hereby authorizes
Custodian to hold any Securities received by it from time to time for
Customer's account. Custodian shall be entitled to utilize the Book-
Entry System and Depositories to the extend possible in connection with
its performance hereunder. Securities and cash deposited by Custodian
in the Book-Entry System or a Depository will be held subject to
the rules, terms and conditions of the Book-Entry System or such
Depository. Custodian shall identify on its books and records the U.S.
Securities and cash belonging to Customer, whether held directly or
indirectly through the Book-Entry System or a Depository. U.S.
Securities and cash of Customer deposited in the Book-Entry System or a
Depository will be represented in accounts which include only assets
held by Custodian for its customers.
2. Custodian shall furnish Customer with an advice of daily
transactions and a monthly summary of all transfers to or from the
Account.
3. With respect to all U.S. Securities held in the Account,
Custodian shall, unless otherwise instructed to the contrary:
(a) Receive all income and other payments and advise
Customer as promptly as practicable of any such amounts due but not
paid;
(b) Present for payment and receive the amount paid upon all
U.S. Securities which may mature and advise Customer as promptly as
practicable of any such amounts due but not paid;
(c) Forward to Customer copies of all information or
documents that it may receive from an issuer of U.S. Securities which,
in the opinion of Custodian, are intended for the beneficial owner of
U.S. Securities;
(d) Execute, as custodian, any certificates of ownership,
affidavits, declarations or other certificates under any tax laws now
or hereafter in effect in connection with the collection of bond and
note coupons;
(e) Hold directly, or through the Book-Entry System or a
Depository, all rights and similar U.S. Securities issued with respect
to any U.S. Securities credited to the Account hereunder; and
(f) Endorse for collection checks, drafts or other
negotiable instruments.
4. (a) Whenever U.S. Securities (including, but not limited to,
warrants, options, tenders, options to tender or non-mandatory puts or
calls) confer optional rights on Customer or provide for discretionary
action or alternative courses of action by Customer, Customer shall be
responsible for making any decisions relating thereto and for directing
Custodian to act. In order for Custodian to act, it must receive
Customer's Written Instructions at Custodian's offices, addressed as
Custodian may
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from time to time request, not later than noon (New York
time) at least two (2) Business Days prior to the last scheduled date
to act with respect to such U.S. Securities (or such earlier date or
time as Custodian may notify Customer). Absent Custodian's timely
receipt of such written instructions, Custodian shall not be liable for
failure to take any action relating to or to exercise any rights
conferred by such U.S. Securities.
(b) Custodian shall endeavor to notify Customer of such rights
or discretionary actions or of the date or dates by when such rights must
be excercised or such action must be taken provided that Custodian has
received, from the issuer, timely notice of such rights or discretionary
corporate action or of the date or dates such rights must be exercised or
such action must be taken. Absent actual receipt of such notice, Custodian
shall have no liability for failing to so notify Customer.
5. All voting rights with respect to U.S. Securities, however
registered, shall be exercised by Customer or its designee.
Custodian's only duty shall be to mail to Customer any documents
(including proxy statements, annual reports and signed proxies)
relating to the exercise of such voting rights.
6. Custodian shall promptly advise Customer upon its
notification of the partial redemption, partial payment or other action
affecting less than all U.S. Securities of the relevant class. If
Custodian or Depository holds any U.S. Securities in which Customer has
an interest as part of a fungible mass, Custodian or Depository may
select the U.S. Securities to participate in such partial redemption,
partial payment or other action in any non-discriminatory manner that
it customarily uses to make such selection.
7. Custodian shall not under any circumstances accept bearer
interest coupons which have been stripped from United States federal,
state or local government or agency securities unless explicitly agreed
to by Custodian in writing.
ARTICLE IV
PURCHASE AND SALE OF U.S. SECURITIES;
CREDITS TO ACCOUNT
1. Promptly after each purchase or sale of U.S. Securities by
Customer, Customer shall deliver to Custodian Written Instructions
specifying all information necessary for Custodian to settle such
purchase or sale. Custodian shall account for all purchases and sales
of U.S. Securities on the actual settlement date unless otherwise
agreed to Custodian.
2. Customer understands that when Custodians instructed to
deliver U.S. Securities against payment, delivery of such U.S.
Securities and receipt of payment therefor may not be completed
simultaneously. Customer assumes full responsibility for all credit
risks involved in connection with Custodian's delivery of U.S.
Securities pursuant to instructions of Customer.
3. Custodian may, as a matter of bookkeeping convenience or by
separate agreement with Customer, credit the Account with the proceeds
from the sale, redemption or other disposition of U.S. Securities or
interest, dividends or other distributions payable on U.S. Securities
prior to its actual receipt of final payment therefor. All such
credits shall be conditional until Custodian's actual receipt of final
payment and may be reversed by Custodian to the extent that final
payment is not received. Payment with respect to a transaction will
not be "final" until Custodian shall have received immediately
available funds which under applicable law or rule are irreversible and
not subject to any security interest, levy or other encumbrance, and
which are specifically applicable to such transaction.
4. Custodian shall have no obligation, and shall not be liable,
for any loss or damage whatsoever resulting from its failure to settle
any Security transaction where the rules of a Depository prevent the
receipt or delivery of such Security (i.e., that the Security has been
"chilled"). Custodian may, but shall have no obligation to, attempt to
utilize alternative methods of delivering securities from time to time
offered by a Depository.
ARTICLE V
OVERDRAFTS OR INDEBTEDNESS
If Custodian in its sole discretion advances funds to Customer or
there shall arise for whatever reason an overdraft in the Account
(including, without limitation, overdrafts incurred in connection with
the settlement of securities transactions or funds transfers or if
Customer is for any other reason indebted to Custodian,Customer agrees
to repay Custodian on demand the amount of the advance,overdraft or
indebtedness plus accrued interest at a rate ordinarily charged by
Custodian to its institutional custody customers. In order to secure
repayment of Customer's obligations to Custodian hereunder, Customer
hereby agrees that Custodian shall have a continuing lien and security
interest in and to all U.S. Securities, money and other property now or
hereafter held in the Account (including proceeds thereof), and any
other property at any time held by it for the
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account of Customer. In this regard, Custodian shall be entitled to all
the rights and remedies of a pledgee under common law and a secured party
under the New York Commercial Code and any other applicable laws, rules or
regulations as then in effect.
ARTICLE VI
CONCERNING CUSTODIAN
1. (a) Custodian shall exercise the due care expected of a
professional custodian for hire with respect to the Securities in its
possession or control. Except as otherwise expressly provided herein,
Custodian shall not be liable for any costs, expenses, damages,
liabilities or claims (including attorneys' and accounts' fees)
incurred by or asserted against Customer, except those costs, expenses,
damages, liabilities or claims arising out of the negligence, fraud or
wilful misconduct of Custodian. Custodian shall have no obligation
hereunder for costs, expenses, damages, liabilities or claims
(including attorneys' or accounts' fees) which are sustained or
incurred by reason of any action or inaction by the Book-Entry System
or any Depository, unless such action or inaction is caused by the
negligence, fraud or wilful misconduct of Custodian. In no event shall
Custodian be liable to Customer or any third party for special,
indirect or consequential damages, or lost profits or loss of business,
arising in connection with this Agreement.
(b) Customer agrees to indemnify Custodian and hold
Custodian harmless from and against any and all costs, expenses,
damages, liabilities and claims (including reasonable attorneys' fees
and accounts' fees), sustained or incurred by or asserted against
Custodian by reason of or as a result of any action or inaction, or
arising out of Custodian's performance hereunder, including reasonable
fees and expenses of counsel incurred by Custodian in a successful
defense of claims by Customer; provided, that Customer shall not
indemnify Custodian for those costs, expenses, damages, liabilities or
claims arising out of Custodian's negligence, fraud or wilful
misconduct. This indemnity shall be a continuing obligation of
Customer, its successors and assigns, notwithstanding the termination
of this Agreement.
(c) If any loss of Securities arises out of the negligence,
fraud or wilful misconduct of Custodian, or if any loss of definitive
Securities arises out of the (I) negligence or dishonesty of
Custodian's officers and employees, or (ii) burglary, robbery, holdup,
theft or mysterious disappearance, including loss by damage or
destruction (while the definitive Securities are in Custodian's
physical possession), Custodian shall promptly replace such Securities
with like kind and quality, together with all rights and privileges
pertaining to such Securities or, if acceptable to Customer, deliver
the cash equivalent to the extent of the fair market value of the
Securities as of the date of discovery of such loss.
2. Without limiting the generality of the foregoing, Custodian
shall be under no obligation to inquire into, and shall not be liable
for, any losses incurred by Customer or any other person as a result of
the receipt or acceptance of fraudulent, forged or invalid U.S.
Securities, or U.S. Securities which are otherwise not freely
transferable or deliverable without encumbrance.
3. Custodian may, with respect to questions of law related to
this Agreement and Custodian's performance hereunder, obtain the advice
of counsel, at the expense of Customer if prior approval is received
from Customer. Custodian shall be fully protected with respect to
anything done or omitted by it in good faith in conformity with such
advice.
4. Custodian shall be under no obligation to take action to
collect any amount payable on U.S. Securities in default, or if payment
is refused after due demand and presentment.
5. Custodian shall have no duty or responsibility to inquire
into, make recommendations, supervise, or determine the suitability of
any transactions affecting any Account.
6. Customer shall pay to Custodian the fees set forth in
Schedule I attached hereto, such fees to remain in effect for a period
of two years from the date of this Agreement. Customer shall reimburse
Custodian for all costs associated with the conversion of Customer's
Securities hereunder and the transfer of Securities and records kept in
connection with this Agreement. Custodian hereby waives all customary
fees for services performed in conjunction with the initial conversion
of Customer's Securities hereunder and the transfer of Securities and
records kept in connection with such Securities initially converted.
7. Custodian shall be entitled to rely upon any Written or Oral
Instruction actually received by Custodian and reasonably believed by
Custodian to be duly authorized and delivered. Customer agrees to
forward to Custodian Written Instructions confirming Oral Instructions
by the close of business of same day that such Oral Instructions are
given to Custodian. Customer agrees that the fact that such confirming
Written Instructions are not received or that contrary Written
Instructions are received by Custodian shall in no way affect the
validity or enforceability of transactions authorized by such Oral
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Instructions and effected by Custodian. If Customer elects to transmit
Written Instructions through an on-line communication system offered by
Custodian, Customer's use thereof shall be subject to the Terms and
Conditions attached hereto as Appendix I.
8. (a) During Custodian's normal business hours upon receipt of
reasonable notice from Customer, any officer or employee of the
Customer, any independent account(s) selected by the Customer and any
person designated by any regulatory authority having jurisdiction over
Customer shall be entitled to examine on Custodian's premises.
Securities held by Custodian on its premises and the Custodian's
records regarding Securities held hereunder deposited with entities
authorized to hold Securities in accordance with Article III, Section I
hereof, but only upon Customer's furnishing Custodian with properly
authorized instructions to that effect, provided, such examination
shall be consistent with Custodian's obligations of confidentiality to
other parties. Custodian's costs and expenses in facilitating such
examinations shall be borne by Customer, provided that such costs and
expenses are not deemed to be Custodian's costs in providing Customer
with documents it is otherwise obligated to provide Customer hereunder.
(b) Custodian shall, subject to restrictions under
applicable law, provide for itself and seek to obtain from any entity
with which Custodian maintains the physical possession of any of the
Securities in the Account such records of such entity relating to the
Account as may be reasonably required by the Customer or its agents in
connection with an internal examination by the Customer of its own
affairs. Upon reasonable request from Customer, Custodian shall useits
best efforts to furnish to Customer such reports (or portions thereof)
of the external auditors of each such entity as related directly to
such entity's system of internal accounting controls applicable to its
duties under its agreement with Custodian.
9. It is understood that Custodian is authorized to supply any
information regarding the Account which is required by any law,
regulation or rule now or hereafter in effect.
10. Custodian shall not be responsible or liable for any failure
or delay in the performance its obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances
beyond its reasonable control, including without limitation, acts of
God; earthquakes; fires; floods; wars; civil or military disturbances;
sabotage; epidemics; riots; interruptions, loss or malfunctions of
utilities, computer (hardware or software)or communications service;
accidents; labor disputes; acts of civil or military authority or
governmental actions; it being understood that Custodian shall use its
best efforts to resume performance as soon as practicable under the
circumstances.
11. Custodian may enter into subcontracts, agreements and
understands with any BNY Affiliate, whenever and on such terms and
conditions as it deems necessary or appropriate to perform its services
hereunder. No such subcontract, agreement or understanding shall
discharge Custodian from its obligations hereunder.
12. Custodian shall notify Customer promptly of missing
Securities which could effect the sale, redemption or other payments to
Customer related to such missing Securities. Custodian shall notify
Customer of any position shortages older than 30 days in any Security
held by Customer.
13. Custodian shall have no duties or responsibilities whatsoever
except such duties and responsibilities as are specifically set forth
in this Agreement, and no covenant or obligation shall be implied
against Custodian in connection with this Agreement.
ARTICLE VII
TERMINATION
Each party may terminate this Agreement by giving to the other
party a notice in writing specifying the date of such termination,
which shall be not less than ninety (90) days after the date of such
notice. Upon termination hereof, Customer shall pay to Custodian such
compensation as may be due to Custodian, and shall likewise reimburse
Custodian for other amounts payable or reimbursable to Custodian
hereunder. Custodian shall follow such reasonable Oral or Written
Instructions concerning the transfer of custody of records, U.S.
Securities and other items as Customer shall give; provided, that (a)
Custodian shall have no liability for shipping and insurance costs
associated therewith, and (b) full payment shall have been made to
Custodian of its compensation, costs, expenses and other amounts to
which it is entitled hereunder. If any U.S. Securities or ash remain
in the Account, Custodian may deliver to Customer such U.S. Securities
and cash. Upon termination of this Agreement, except as otherwise
provided herein, all obligations of the parties to each other hereunder
shall cease.
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ARTICLE VIII
MISCELLANEOUS
1. Customer agrees to furnish to Custodian a new Certificate of
Authorized Persons in the event of any change in the then present
Authorized Persons. Until such new Certificate is received, Custodian
shall be fully protected in acting upon Oral Instructions and Written
Instruction of such present Authorized Persons.
2. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to Custodian, shall be
sufficiently given if addressed to Custodian and received by it at its
offices at One Wall Street - Financial Instructions Division, Xxx Xxxx,
Xxx Xxxx 00000, or at such other place as Custodian may from time to
time designate in writing.
3. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to Customer shall be
sufficiently given if addressed to Customer and received by it at its
offices at 000 Xxxxxx Xxxxxx, X.X. Xxx 0000, Xxx Xxxxxx, Xxxx 50306-
1635, or at such other place as Customer may from time to time
designate in writing.
4. Each and every right granted to either party hereunder or
under any other document delivered hereunder or in connection herewith,
or allowed it by law or equity, shall be cumulative and may be
exercised from ime to time. No failure on the part of either party to
exercise, and no delay in exercising, any right will operate as a
waiver thereof, nor will any single or partial exercise by either party
of any right preclude any other or future exercise thereof or the
exercise of any other right.
5. In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions shall
not in any way be affected thereby. This Agreement may not be amended
or modified in any manner except by a written agreement executed by
both parties. This Agreement shall extend to and shall be binding upon
the parties hereto, and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable by
either party without the written consent of the other.
6. This Agreement shall be construed in accordance with the
substantive laws of the State of New York, without regard to conflicts
of laws principles thereof. Customer and Custodian hereby consent to
the jurisdiction of a state or federal court situated in New York City,
New York in connection with any dispute arising hereunder. To the
extent that in any jurisdiction Customer may now or hereafter be
entitled to claim, for itself or its assets, immunity from suit,
execution, attachment (before or after judgment) or other legal
process, Customer irrevocably agrees not to claim, and it hereby
waives, such immunity.
7. The parties hereto agree that in performing hereunder,
Custodian is acting solely on behalf of Customer and no contractual or
service relationship shall be deemed to be established hereby between
Custodian and any other person.
8. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
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IN WITNESS WHEREOF, Customer and Custodian have caused this
Agreement to be executed by their respective officers, thereunto duly
authorized, as of the day and year first above written.
FIRST GOLDEN AMERICAN LIFE
INSURANCE COMPANY OF NEW YORK
By: /s/Xxxxx X. Xxxxxxx
-------------------------
Xxxxx X. Xxxxxxx
Title: Executive Vice President
Tax Identification No.: 00-0000000
THE BANK OF NEW YORK
By: /s/Xxxxxxxxxxx X. Xxxxxx
--------------------------
Xxxxxxxxxxx X. Xxxxxx
Title: Vice President
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APPENDIX I
THE BANK OF NEW YORK
ON-LINE COMMUNICATIONS SYSTEM (THE "SYSTEM")
TERMS AND CONDITIONS
1. License; Use. Upon delivery to Customer of software enabling
Customer to obtain access to the System (the "Software"), Custodian
grants to Customer a personal, nontransferable and nonexclusive license
to use the Software solely for the purpose of transmitting and
receiving communications to and from Custodian in connection with
Customer's Account(s). Customer shall not sell, lease or otherwise
provide, directly or indirectly, the Software or any portion thereof to
any other person or entity without the written consent of Custodian.
2. Equipment. Customer shall obtain and maintain at its own
cost and expense all equipment and services, including but not limited
to communications services, necessary for it to utilize the Software
and obtain access to the System, and Custodian shall not be responsible
for the reliability or availability of any such equipment or services.
3. Proprietary Information. Customer acknowledges that the
Software, all data bases made available to Customer through the System,
and any proprietary data, processes, information and documentation
(other than which are or become part of the public domain or are
legally required to be made available to the public) (collectively, the
"Information"), are the exclusive and confidential property of
Custodian. Customer shall keep the Information confidential by suing
the same care and discretion that Customer uses with respect to its own
confidential property and trade secrets and shall neither make nor
permit any disclosure without the prior written consent of Custodian.
Upon termination of the Agreement or the Software license granted
hereunder for any reason, Customer shall return all copies of the
Information to Custodian.
4. Modifications. Custodian reserves the right to modify the
Software from time to time and Customer shall install new releases of
the Software as Custodian may direct. Customer agrees not to modify or
attempt to modify the Software without Custodian's prior written
consent. Customer acknowledges that any modifications to the Software,
whether by Customer or Custodian and whether with or without
Custodian's consent, shall be come the property of Custodian.
5. No Representations or Warranties. Custodian makes no
warranties or representations of any kind with regard to the Software
or the System, including but not limited to any implied warranties of
merchantability or fitness for a particular purpose.
6. Security; Reliance; Unauthorized Use. Customer will cause
all persons utilizing the Software and System to treat all applicable
user and authorization codes, passwords and authentication keys with
extreme care. Custodian is hereby irrevocably authorized to act in
accordance with and rely on Written Instructions received by it through
the System. Customer acknowledges that it is its sole responsibility
to assure that only Authorized Persons use the System and that
Custodian shall not be responsible nor liable for any unauthorized use
thereof.
7. System Acknowledgments. Custodian shall acknowledge through
the System its receipt of each Written Instruction communicated through
the System, and in the absence of such acknowledgment Custodian shall
not be liable for any failure to act in accordance with such Written
Instruction and Customer may not clam that such Written Instruction was
received by Custodian.
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