Exhibit 99.2(j)
CUSTODY AGREEMENT
CUSTODIAN SERVICES AGREEMENT
This Agreement is made as of July 30, 1995 by and between ZENIX INCOME FUND
INC., a Maryland corporation (the "Fund") and PNC BANK, NATIONAL ASSOCIATION, a
national banking association ("PNC Bank").
The Fund is registered as a closed-end investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"). The Fund wishes to
retain PNC Bank to provide custodian services and PNC Bank wishes to furnish
such services, either directly or through an affiliate or affiliates, as more
fully described herein. In consideration of the premises and mutual covenants
herein contained, the parties agree as follows:
1. Definitions.
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(a) "Authorized Person". The term "Authorized Person" shall mean any
officer of the Fund and any other person, who is duly authorized by the Fund's
Governing Board, to give Oral and Written Instructions on behalf of the Fund.
Such persons are listed in the Certificate attached hereto as the Authorized
Persons Appendix, as such Appendix may be amended in writing by the Fund's
Governing Board from time to time.
(b) "Book-Entry System". The term "Book-Entry System" means Federal Reserve
Treasury book-entry system for United States and federal agency securities, its
successor or successors, and its nominee or nominees and any book-entry system
maintained by an exchange registered with the SEC under the 1934 Act.
(c) "CFTC". The term "CFTC" shall mean the Commodities Futures Trading
Commission.
(d) "Governing Board". The term "Governing Board" shall mean the Fund's
Board of Directors if the Fund is a corporation or the Fund's Board of Trustees
if the Fund is a trust, or, where duly authorized, a competent committee
thereof.
(e) "Oral Instructions". The term "Oral Instructions" shall mean oral
instructions received by PNC Bank from an Authorized Person or from a person
reasonably believed by PNC Bank to be an Authorized Person.
(f) "SEC". The term "SEC" shall mean the Securities and Exchange
Commission.
(g) "Securities and Commodities Laws". The term "Securities and Commodities
Laws" shall mean the "1933 Act" which shall mean the Securities Act of 1933, the
"1934 Act" which shall mean the Securities Exchange Act of 1934, the 1940 Act,
and the "CEA" which shall mean the Commodities Exchange Act, each as amended.
(h) "Shares". The term "Shares" shall mean the shares of stock of any
series or class of the Fund, or, where appropriate, units of beneficial interest
in a trust where the Fund is organized as a Trust.
(i) "Property". The term "Property" shall mean:
(i) any and all securities and other investment items which the Fund
may from time to time deposit, or cause to be deposited, with PNC
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Bank or which PNC Bank may from time to time hold for the Fund;
(ii) all income in respect of any of such securities or other
investment items;
(iii) all proceeds of the sale of any of such securities or investment
items; and
(iv) all proceeds of the sale of securities issued by the Fund, which
are received by PNC Bank from time to time, from or on behalf of
the Fund.
(j) "Written Instructions". The term "Written Instructions" shall mean
written instructions signed by one Authorized Person and received by PNC Bank.
The instructions may be delivered by hand, mail, tested telegram, cable, telex
or facsimile sending device.
2. Appointment. The Fund hereby appoints PNC Bank to provide custodian
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services to the Fund, and PNC Bank accepts such appointment and agrees to
furnish such services.
3. Delivery of Documents. The Fund has provided or, where applicable, will
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provide PNC Bank with the following:
(a) certified or authenticated copies of the resolutions of the Fund's
Governing Board, approving the appointment of PNC Bank or its affiliates to
provide services;
(b) a copy of the Fund's most recent effective registration statement;
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(c) a copy of the Fund's advisory agreement or agreements;
(d) a copy of the Fund's distribution agreement or agreements;
(e) a copy of the Fund's administration agreements if PNC Bank is not
providing the Fund with such services;
(f) copies of any shareholder servicing agreements made in respect of the
Fund; and
(g) certified or authenticated copies of any and all amendments or
supplements to the foregoing.
4. Compliance with Government Rules and Regulations. PNC Bank undertakes to
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comply with all applicable requirements of the Securities and Commodities Laws
and any laws, rules and regulations of governmental authorities having
jurisdiction with respect to all duties to be performed by PNC Bank hereunder.
Except as specifically set forth herein, PNC Bank assumes no responsibility for
such compliance by the Fund.
5. Instructions. Unless otherwise provided in this Agreement, PNC Bank
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shall act only upon Oral and Written Instructions. PNC Bank shall be entitled to
rely upon any Oral and Written Instructions it receives from an Authorized
Person (or from a person reasonably believed by PNC Bank to be an Authorized
Person) pursuant to this Agreement. PNC Bank may assume that any Oral or Written
Instructions received hereunder are not in any way inconsistent with the
provisions of organizational documents or this Agreement or of any vote,
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resolution or proceeding of the Fund's Governing Board or of the Fund's
shareholders.
The Fund agrees to forward to PNC Bank Written Instructions confirming Oral
Instructions so that PNC Bank receives the Written Instructions by the close of
business on the same day that such Oral Instructions are received. The fact that
such confirming Written Instructions are not received by PNC Bank shall in no
way invalidate the transactions or enforceability of the transactions authorized
by the Oral Instructions.
The Fund further agrees that PNC Bank shall incur no liability to the Fund
in acting upon Oral or Written Instructions provided such instructions
reasonably appear to have been received from an Authorized Person.
6. Right to Receive Advice.
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(a) Advice of the Fund. If PNC Bank is in doubt as to any action it should
or should not take, PNC Bank may request directions or advice, including Oral or
Written Instructions, from the Fund.
(b) Advice of Counsel. If PNC Bank shall be in doubt as to any questions of
law pertaining to any action it should or should not take, PNC Bank may request
advice at its own cost from such counsel of its own choosing (who may be counsel
for the Fund, the Fund's advisor or PNC Bank, at the option of PNC Bank).
(c) Conflicting Advice. In the event of a conflict between directions,
advice or Oral or Written Instructions PNC Bank receives from the Fund, and the
advice it receives from
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counsel, PNC Bank shall be entitled to rely upon and follow the advice of
counsel.
(d) Protection of PNC Bank. PNC Bank shall be protected in any action it
takes or does not take in reliance upon directions, advice or Oral or Written
Instructions it receives from the Fund or from counsel and which PNC Bank
believes, in good faith, to be consistent with those directions, advice or Oral
or Written Instructions.
Nothing in this paragraph shall be construed so as to impose an obligation
upon PNC Bank (i) to seek such directions, advice or Oral or Written
Instructions, or (ii) to act in accordance with such directions, advice or Oral
or Written Instructions unless, under the terms of other provisions of this
Agreement, the same is a condition of PNC Bank's properly taking or not taking
such action.
7. Records. The books and records pertaining to the Fund which are in the
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possession of PNC Bank, shall be the property of the Fund. Such books and
records shall be prepared and maintained as required by the 1940 Act and other
applicable securities laws, rules and regulations. The Fund, or the Fund's
Authorized Persons, shall have access to such books and records at all time
during PNC Bank's normal business hours. Upon the reasonable request of the
Fund, copies of any such books and records shall be provided by PNC Bank to the
Fund or to an Authorized Person of the Fund, at the Fund's expense.
8. Confidentiality. PNC Bank agrees to keep confidential all records of the
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Fund and information relative to the Fund and
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its shareholders (past, present and potential), unless the release of such
records or information is otherwise consented to, in writing, by the Fund. The
Fund agrees that such consent shall not be unreasonably withheld and may not be
withheld where PNC Bank may be exposed to civil or criminal contempt proceedings
or when required to divulge. The Fund further agrees that, should PNC Bank be
required to provide such information or records to duly constituted authorities
(who may institute civil or criminal contempt proceedings for failure to
comply), PNC Bank shall not be required to seek the Fund's consent prior to
disclosing such information.
9. Cooperation with Accountants. PNC Bank shall cooperate with the Fund's
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independent public accountants and shall take all reasonable action in the
performance of its obligations under this Agreement to ensure that the necessary
information is made available to such accountants for the expression of their
opinion, as required by the Fund.
10. Disaster Recovery. PNC Bank shall enter into and shall maintain in
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effect with appropriate parties one or more agreements making reasonable
provision for emergency use of electronic data processing equipment to the
extent appropriate equipment is available. In the event of equipment failures,
PNC Bank shall, at no additional expense to the Fund, take reasonable steps to
minimize service interruptions but shall have no liability with respect thereto.
11. Compensation. As compensation for custody services rendered by PNC Bank
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during the term of this Agreement, the Fund
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will pay to PNC Bank a fee or fees as may be agreed to from time to time in
writing by the Fund and PNC Bank.
12. Indemnification. The Fund agrees to indemnify and hold harmless PNC
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Bank and its nominees from all taxes, charges, expenses, assessment, claims and
liabilities (including, without limitation, liabilities arising under the
Securities and Commodities Laws and any state and foreign securities and blue
sky laws, and amendments thereto, and expenses, including (without limitation)
attorneys' fees and disbursements, arising directly or indirectly from any
action which PNC Bank takes or does not take (i) at the request or on the
direction of or in reliance on the advice of the Fund or (ii) upon Oral or
Written Instructions. Neither PNC Bank, nor any of its nominees, shall be
indemnified against any liability to the Fund or to its shareholders (or any
expenses incident to such liability) arising out of PNC Bank's own willful
misfeasance, bad faith, negligence or reckless disregard of its duties and
obligations under this Agreement.
13. Responsibility of PNC Bank. PNC Bank shall be under no duty to take any
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action on behalf of the Fund except as specifically set forth herein or as may
be specifically agreed to by PNC Bank, in writing. PNC Bank shall be obligated
to exercise care and diligence in the performance of its duties hereunder, to
act in good faith and to use its best effort, within reasonable limits, in
performing services provided for under this Agreement. PNC Bank shall be
responsible for its own negligent failure to perform its duties under this
Agreement. Notwithstanding the
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foregoing, PNC Bank shall not be responsible for losses beyond its control,
provided that PNC Bank has acted in accordance with the standard of care set
forth above; and provided further that PNC Bank shall only be responsible for
that portion of losses or damages suffered by the Fund that are attributable to
the negligence of PNC Bank.
Without limiting the generality of the foregoing or of any other provision
of this Agreement, PNC Bank, in connection with its duties under this Agreement,
shall not be under any duty or obligation to inquire into and shall not be
liable for (a) the validity or invalidity or authority or lack thereof of any
Oral or Written Instruction, notice or other instrument which conforms to the
applicable requirements of this Agreement, and which PNC Bank reasonably
believes to be genuine; or (b) delays or errors or loss of data occurring by
reason of circumstances beyond PNC Bank's control, including acts of civil or
military authority, national emergencies, labor difficulties, fire, flood or
catastrophe, acts of God, insurrection, war, riots or failure of the mails,
transportation, communication or power supply.
Notwithstanding anything in this Agreement to the contrary, PNC Bank shall
have no liability to the Fund for any consequential, special or indirect losses
or damages which the Fund may incur or suffer by or as a consequence of PNC
Bank's performance of the services provided hereunder, whether or not the
likelihood of such losses or damages was known by PNC Bank.
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14. Description of Services.
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(a) Delivery of the Property. The Fund will deliver or arrange for delivery
to PNC Bank, all the property owned by the Fund, including cash received as a
result of the distribution of its Shares, during the period that is set forth in
this Agreement. PNC Bank will not be responsible for such property until actual
receipt.
(b) Receipt and Disbursement of Money. PNC Bank, acting upon Written
Instructions, shall open and maintain separate account(s) in the Fund's name
using all cash received from or for the account of the Fund, subject to the
terms of this Agreement. In addition, upon Written Instructions, PNC Bank shall
open separate custodial accounts for each separate series, class or portfolio of
the Fund and shall hold in such account(s) all cash received from or for the
accounts of the Fund specifically designated to each separate series, class or
portfolio. PNC Bank shall make cash payments from or for the account of the Fund
only for:
(i) purchases of securities in the name of the Fund or PNC Bank or
PNC Bank's nominee as provided in sub-paragraph j and for which
PNC Bank has received a copy of the broker's or dealer's
confirmation or payee's invoice, as appropriate;
(ii) purchase or redemption of Shares of the Fund delivered to PNC
Bank;
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(iii) payment of, subject to Written Instructions, interest, taxes,
administration, accounting, distribution, advisory, management
fees or similar expenses which are to be borne by the Fund;
(iv) payment to, subject to receipt of Written Instructions, the
Fund's transfer agent, as agent for the shareholders, an amount
equal to the amount of dividends and distributions stated in the
Written Instructions to be distributed in cash by the transfer
agent to shareholders, or, in lieu of paying the Fund's transfer
agent, PNC Bank may arrange for the direct payment of cash
dividends and distributions to shareholders in accordance with
procedures mutually agreed upon from time to time by and among
the Fund, PNC Bank and the Fund's transfer agent;
(v) payments, upon receipt of Written Instructions, in connection
with the conversion, exchange or surrender of securities owned or
subscribed to by the Fund and held by or delivered to PNC Bank;
(vi) payments of the amounts of dividends received with respect to
securities sold short; payments made to a sub-custodian pursuant
to
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provisions in sub-paragraph c of this Paragraph; and
(vii) payments, upon Written Instructions made for other proper Fund
purposes. PNC Bank is hereby authorized to endorse and collect
all checks, drafts or other orders for the payment of money
received as custodian for the account of the Fund.
(c) Receipt of Securities.
(i) PNC Bank shall hold all securities received by it for the account
of the Fund in a separate account that physically segregates such
securities from those of any other persons, firms or
corporations, except for securities held in a Book-Entry System.
All such securities shall be held or disposed of only upon
Written Instructions of the Fund pursuant to the terms of this
Agreement. PNC Bank shall have no power or authority to assign,
hypothecate, pledge or otherwise dispose of any such securities
or investment, except upon the express terms of this Agreement
and upon Written Instructions, accompanied by a certified
resolution of the Fund's Governing Board, authorizing the
transaction. In no case may any member of the Fund's Governing
Board, or any officer,
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employee or agent of the Fund withdraw any securities. At PNC
Bank's own expense and for its own convenience, PNC Bank may
enter into sub-custodian agreements with other banks or trust
companies to perform duties described in this sub-paragraph c.
Such bank or trust company shall have an aggregate capital,
surplus and undivided profits, according to its last published
report, of at least one million dollars ($1,000,000), if it is a
subsidiary or affiliate of PNC Bank, or at least twenty million
dollars ($20,000,000) if such bank or trust company is not a
subsidiary or affiliate of PNC Bank. In addition, such bank or
trust company must agree to comply with the relevant provisions
of the 1940 Act and other applicable rules and regulations. PNC
Bank shall remain responsible for the performance of all of its
duties as described in this Agreement and shall hold the Fund
harmless from PNC Bank's own (or any sub-custodian chosen by PNC
Bank under the terms of this sub-paragraph c) acts or omissions,
under the standards of care provided for herein.
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(d) Transactions Requiring Instructions. Upon receipt of Oral or Written
Instructions and not otherwise, PNC Bank, directly or through the use of the
Book-Entry System, shall:
(i) deliver any securities held for the Fund against the receipt of
payment for the sale of such securities;
(ii) execute and deliver to such persons as may be designated in such
Oral or Written Instructions, proxies, consents, authorizations,
and any other instruments whereby the authority of the Fund as
owner of any securities may be exercised;
(iii) deliver any securities to the issuer thereof, or its agent, when
such securities are called, redeemed, retired or otherwise become
payable; provided that, in any such case, the cash or other
consideration is to be delivered to PNC Bank;
(iv) deliver any securities held for the Fund against receipt of other
securities or cash issued or paid in connection with the
liquidation, reorganization, refinancing, tender offer, merger,
consolidation or recapitalization of any corporation, or the
exercise of any conversion privilege;
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(v) deliver any securities held for the Fund to any protective
committee, reorganization committee or other person in connection
with the reorganization, refinancing, merger, consolidation,
recapitalization or sale of assets of any corporation, and
receive and hold under the terms of this Agreement such
certificates of deposit, interim receipts or other instruments or
documents as may be issued to it to evidence such delivery;
(vi) make such transfer or exchanges of the assets of the Fund and
take such other steps as shall be stated in said Oral or Written
Instructions to be for the purpose of effectuating a duly
authorized plan of liquidation, reorganization, merger,
consolidation or recapitalization of the Fund;
(vii) release securities belonging to the Fund to any bank or trust
company for the purpose of a pledge or hypothecation to secure
any loan incurred by the Fund; provided, however, that securities
shall be released only upon payment to PNC Bank of the monies
borrowed, except that in cases where additional collateral is
required, to secure a borrowing already made subject to proper
prior
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authorization, further securities may be released for that
purpose; and repay such loan upon redelivery to it of the
securities pledged or hypothecated therefor and upon surrender of
the note or notes evidencing the loan;
(viii) release and deliver securities owned by the Fund in connection
with any repurchase agreement entered into on behalf of the Fund,
but only on receipt of payment therefor; and pay out moneys of
the Fund in connection with such repurchase agreements, but only
upon the delivery of the securities;
(ix) release and deliver or exchange securities owned by the Fund in
connection with any conversion of such securities, pursuant to
their terms, into other securities;
(x) release and deliver securities owned by the Fund for the purpose
of redeeming in kind shares of the Fund upon delivery thereof to
PNC Bank; and
(xi) release and deliver or exchange securities owned by the Fund for
other corporate purposes. PNC Bank must also receive a certified
resolution describing the nature of the corporate purpose and the
name and
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address of the person(s) to whom delivery shall be made when such
action is pursuant to sub-paragraph d above.
(e) Use of Book-Entry System. The Fund shall deliver to PNC Bank certified
resolutions of the Fund's Governing Board approving, authorizing and instructing
PNC Bank on a continuous and on-going basis, to deposit in the Book-Entry System
all securities belonging to the Fund eligible for deposit therein and to utilize
the Book-Entry System to the extent possible in connection with settlements of
purchases and sales of securities by the Fund, and deliveries and returns of
securities loaned, subject to repurchase agreements or used as collateral in
connection with borrowings. PNC Bank shall continue to perform such duties until
it receives Written or Oral Instructions authorizing contrary actions(s).
To administer the Book-Entry System properly, the following provisions
shall apply:
(i) With respect to securities of the Fund which are maintained in
the Book-Entry system, established pursuant to this sub-paragraph
e hereof, the records of PNC Bank shall identify by Book-Entry or
otherwise those securities belonging to the Fund. PNC Bank shall
furnish the Fund a detailed statement of the Property held for
the Fund under this Agreement at least monthly and from time to
time and upon written request.
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(ii) Securities and any cash of the Fund deposited in the Book-Entry
System will at all times be segregated from any assets and cash
controlled by PNC Bank in other than a fiduciary or custodian
capacity but may be commingled with other assets held in such
capacities. PNC Bank and its sub-custodian, if any, will pay out
money only upon receipt of securities and will deliver securities
only upon the receipt of money.
(iii) All books and records maintained by PNC Bank which relate to the
Fund's participation in the Book-Entry System will at all times
during PNC Bank's regular business hours be open to the
inspection of the Fund's duly authorized employees or agents, and
the Fund will be furnished with all information in respect of the
services rendered to it as it may require.
(iv) PNC Bank will provide the Fund with copies of any report obtained
by PNC Bank on the system of internal accounting control of the
Book-Entry System promptly after receipt of such a report by PNC
Bank. PNC Bank will also provide the Fund with such reports on
its own system of internal control as the Fund may reasonably
request from time to time.
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(f) Registration of Securities. All Securities held for the Fund which are
issued or issuable only in bearer form, except such securities held in the
Book-Entry System, shall be held by PNC Bank in bearer form; all other
securities held for the Fund may be registered in the name of the Fund; PNC
Bank; the Book-Entry System; a sub-custodian; or any duly appointed nominee(s)
of the Fund, PNC Bank, Book-Entry System or sub-custodian. The Fund reserves the
right to instruct PNC Bank as to the method of registration and safekeeping of
the securities of the Fund. The Fund agrees to furnish to PNC Bank appropriate
instruments to enable PNC Bank to hold or deliver in proper form for transfer,
or to register its registered nominee or in the name of the Book-Entry System,
any securities which it may hold for the account of the Fund and which may from
time to time be registered in the name of the Fund. PNC Bank shall hold all such
securities which are not held in the Book-Entry System in a separate account for
the Fund in the name of the Fund physically segregated at all times from those
of any other person or persons.
(g) Voting and Other Action. Neither PNC Bank nor its nominee shall vote
any of the securities held pursuant to this Agreement by or for the account of
the Fund, except in accordance with Written Instructions. PNC Bank, directly or
through the use of the Book-Entry System, shall execute in blank and promptly
deliver all notice, proxies, and proxy soliciting materials to the registered
holder of such securities. If the registered
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holder is not the Fund then Written or Oral Instructions must designate the
person(s) who owns such securities.
(h) Transactions Not Requiring Instructions. In the absence of contrary
Written Instructions, PNC Bank is authorized to take the following actions:
(i) Collection of Income and Other Payments.
(A) collect and receive for the account of the Fund, all income,
dividends, distributions, coupons, option premiums, other
payments and similar items, included or to be included in
the Property, and, in addition, promptly advise the Fund of
such receipt and credit such income, as collected, to the
Fund's custodian account;
(B) endorse and deposit for collection, in the name of the Fund,
checks, drafts, or other orders for the payment of money;
(C) receive and hold for the account of the Fund all securities
received as a distribution on the Fund's portfolio
securities as a result of a stock dividend, share split-up
or reorganization, recapitalization, readjustment or other
rearrangement or distribution of rights or similar
securities issued with respect to any
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portfolio securities belonging to the Fund held by PNC Bank
hereunder;
(D) present for payment and collect the amount payable upon all
securities which may mature or be called, redeemed, or
retired, or otherwise become payable on the date such
securities become payable; and
(E) take any action which may be necessary and proper in
connection with the collection and receipt of such income
and other payments and the endorsement for collection of
checks, drafts, and other negotiable instruments.
(ii) Miscellaneous Transactions.
(A) PNC Bank is authorized to deliver or cause to be delivered
Property against payment or other consideration or written
receipt therefor in the following cases:
(1) for examination by a broker or dealer selling for the
account of the Fund in accordance with street delivery
custom;
(2) for the exchange of interim receipts or temporary
securities for definitive securities; and
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(3) for transfer of securities into the name of the Fund or
PNC Bank or nominee of either, or for exchange of
securities for a different number of bonds,
certificates, or other evidence, representing the same
aggregate face amount or number of units bearing the
same interest rate, maturity date and call provisions,
if any; provided that, in any such case, the new
securities are to be delivered to PNC Bank.
(B) Unless and until PNC Bank receives Oral or Written
Instructions to the contrary, PNC Bank shall:
(1) pay all income items held by it which call for payment
upon presentation and hold the cash received by it upon
such payment for the account of the Fund;
(2) collect interest and cash dividends received, with
notice to the Fund, to the Fund's account;
(3) hold for the account of the Fund all stock dividends,
rights and similar securities issued with
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respect to any securities held by PNC Bank; and
(4) execute as agent on behalf of the Fund all necessary
ownership certificates required by the Internal Revenue
Code or the Income Tax Regulations of the United States
Treasury Department or under the laws of any State now
or hereafter in effect, inserting the Fund's name, on
such certificate as the owner of the securities covered
thereby, to the extent it may lawfully do so.
(i) Segregated Accounts.
(i) PNC Bank shall upon receipt of Written or Oral Instructions
establish and maintain segregated account(s) on its records for
and on behalf of the Fund. Such account(s) may be used to
transfer cash and securities, including securities in the
Book-Entry System:
(A) for the purposes of compliance by the Fund with the
procedures required by a securities or option exchange,
providing such procedures comply with the 1940 Act and any
releases of the SEC relating to
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the maintenance of segregated accounts by registered
investment companies; and
(B) Upon receipt of Written Instructions, for other proper
corporate purposes.
(ii) PNC Bank may enter into separate custodial agreements with
various futures commission merchants ("FCMs") that the Fund uses
("FCM Agreement"). Pursuant to an FCM Agreement, the Fund's
margin deposits in any transactions involving futures contracts
and options on futures contracts will be held by PNC Bank in
accounts ("FCM Account") subject to the disposition by the FCM
involved in such contracts and in accordance with the customer
contract between FCM and the Fund ("FCM Contract"), SEC rules and
the rules of the applicable commodities exchange. Such FCM
Agreements shall only be entered into upon receipt of Written
Instructions from the Fund which state that:
(A) a customer agreement between the FCM and the Fund has been
entered into; and
(B) the Fund is in compliance with all the rules and regulations
of the CFTC. Transfers of initial margin shall be made into
a FCM Account only upon Written Instructions; transfers of
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premium and variation margin may be made into a FCM Account
pursuant to Oral Instructions. Transfers of funds from a FCM
Account to the FCM for which PNC Bank holds such an account
may only occur upon certification by the FCM to PNC Bank
that pursuant to the FCM Agreement and the FCM Contract, all
conditions precedent to its right to give PNC Bank such
instructions have been satisfied.
(iii) PNC Bank shall arrange for the establishment of XXX custodian
accounts for such shareholders holding Shares through XXX
accounts, in accordance with the Fund's prospectuses, the
Internal Revenue Code (including regulations), and with such
other procedures as are mutually agreed upon from time to time by
and among the Fund, PNC Bank and the Fund's transfer agent.
(j) Purchases of Securities. PNC Bank shall settle purchased securities
upon receipt of Oral or Written Instructions from the Fund or its investment
advisor(s) that specify:
(i) the name of the issuer and the title of the securities, including
CUSIP number if applicable;
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(ii) the number of shares or the principal amount purchased and
accrued interest, if any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon such purchase; and
(vi) the name of the person from whom or the broker through whom the
purchase was made. PNC Bank shall upon receipt of securities
purchased by or for the Fund pay out of the moneys held for the
account of the Fund the total amount payable to the person from
whom or the broker through whom the purchase was made, provided
that the same conforms to the total amount payable as set forth
in such Oral or Written Instructions.
(k) Sales of Securities. PNC Bank shall settle sold securities upon receipt
of Oral or Written Instructions from the Fund that specify:
(i) the name of the issuer and the title of the security, including
CUSIP number if applicable;
(ii) the number of shares or principal amount sold, and accrued
interest, if any;
(iii) the date of trade, settlement and sale;
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(iv) the sale price per unit;
(v) the total amount payable to the Fund upon such sale;
(vi) the name of the broker through whom or the person to whom the
sale was made; and
(vii) the location to which the security must be delivered and
delivery deadline, if any. PNC Bank shall deliver the securities
upon receipt of the total amount payable to the Fund upon such
sale, provided that the total amount payable is the same as was
set forth in the Oral or Written Instructions. Subject to the
foregoing, PNC Bank may accept payment in such form as shall be
satisfactory to it, and may deliver securities and arrange for
payment in accordance with the customs prevailing among dealers
in securities.
(l) Reports.
(i) PNC Bank shall furnish the Fund the following reports:
(A) such periodic and special reports as the Fund may reasonably
request;
(B) a monthly statement summarizing all transactions and entries
for the account of the Fund, listing the portfolio
securities belonging to the Fund with
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the adjusted average cost of each issue and the market value
at the end of such month, and stating the cash account of
the Fund including disbursement;
(C) the reports to be furnished to the Fund pursuant to Rule
17f-4; and
(D) such other information as may be agreed upon from time to
time between the Fund and PNC Bank.
(ii) PNC Bank shall transmit promptly to the Fund any proxy statement,
proxy material, notice of a call or conversion or similar
communication received by it as custodian of the Property. PNC
Bank shall be under no other obligation to inform the Fund as to
such actions or events.
(m) Collections. All collections of monies or other property, in respect,
or which are to become part of the Property (but not the safekeeping thereof
upon receipt by PNC Bank) shall be at the sole risk of the Fund. If payment is
not received by PNC Bank within a reasonable time after proper demands have been
made, PNC Bank shall notify the Fund in writing, including copies of all demand
letters, any written responses, memoranda of all oral responses and telephonic
demands thereto, and await instructions from the Fund. PNC Bank shall not be
obliged to take legal action for collection unless and until reasonably
indemnified to its satisfaction. PNC Bank shall also notify the
28
Fund as soon as reasonably practicable whenever income due on securities is not
collected in due course.
15. Duration and Termination. This Agreement shall continue until
------------------------
terminated by the Fund or by PNC Bank on sixty (60) days' prior written notice
to the other party. In the event this Agreement is terminated (pending
appointment of a successor to PNC Bank or vote of the shareholders of the Fund
to dissolve or to function without a custodian of its cash, securities or other
property), PNC Bank shall not deliver cash, securities or other property of the
Fund to the Fund. It may deliver them to a bank or trust company of PNC Bank's
choice, having an aggregate capital, surplus and undivided profits, as shown by
its last published report, of not less than twenty million dollars
($20,000,000), as a custodian for the Fund to be held under terms similar to
those of this Agreement. PNC Bank shall not be required to make any such
delivery or payment until full payment shall have been made to PNC Bank of all
of its fees, compensation, costs and expenses. PNC Bank shall have a security
interest in and shall have a right of setoff against Property in the Fund's
possession as security for the payment of such fees, compensation, costs and
expenses.
16. Notices. All notices and other communications, including Written
-------
Instructions, shall be in writing or by confirming telegram, cable, telex or
facsimile sending device. Notice shall be addressed (a) if to PNC Bank at PNC
Bank's address: Airport Business Center, International Court 2, 000 Xxxxxxx
Xxxxx, Xxxxxx, Xxxxxxxxxxxx 00000, marked for the
29
attention of the Custodian Services Department (or its successor) (b) if to the
Fund, at the address of the Fund; or (c) if to neither of the foregoing, at such
other address as shall have been notified to the sender of any such notice or
other communication. If notice is sent by confirming telegram, cable, telex or
facsimile sending device, it shall be deemed to have been given immediately. If
notice is sent by first-class mail, it shall be deemed to have been given five
days after it has been mailed. If notice is sent by messenger, it shall be
deemed to have been given on the day it is delivered.
17. Amendments. This Agreement, or any term hereof, may be changed or
----------
waived only by a written amendment, signed by the party against whom enforcement
of such change or waiver is sought.
18. Delegation. PNC Bank may assign its rights and delegate its duties
----------
hereunder to any wholly-owned direct or indirect subsidiary of PNC Bank,
National Association or PNC Bank Corp., provided that (i) PNC Bank gives the
Fund thirty (30) days prior written notice; (ii) the delegate agrees with PNC
Bank to comply with all relevant provisions of the 1940 Act; and (iii) PNC Bank
and such delegate promptly provide such information as the Fund may request, and
respond to such questions as the Fund may ask, relative to the assignment,
including (without limitation) the capabilities of the delegate.
19. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original,
30
but all of which together shall constitute one and the same instrument.
20. Further Actions. Each party agrees to perform such further acts and
---------------
execute such further documents as are necessary to effectuate the purposes
hereof.
21. Miscellaneous. This Agreement embodies the entire agreement and
-------------
understanding between the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof, provided that the parties
may embody in one or more separate documents their agreement, if any, with
respect to delegated duties and/or Oral Instructions. The captions in this
Agreement are included for convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect their construction or
effect.
This Agreement shall be deemed to be a contract made in Pennsylvania and
governed by Pennsylvania law, without regard to principles of conflicts of law.
If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below on the day and year first above
written.
31
PNC BANK, NATIONAL ASSOCIATION
By:/s/ PNC Bank, National Association
---------------------------------------
Title:
ZENIX INCOME FUND INC.
By:/s/ Xxxxx X. XxXxxxxx
--------------------------
Title:
32
AUTHORIZED PERSONS APPENDIX
NAME (Type) SIGNATURE
___________________ ___________________
___________________ ___________________
___________________ ___________________
___________________ ___________________
___________________ ___________________
33
