EXHIBIT 99.2(j)
FORM OF CUSTODIAN SERVICES AGREEMENT
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THIS AGREEMENT is made as of ____, 1998 by and between PNC BANK, NATIONAL
ASSOCIATION, a national banking association ("PNC Bank"), and CONSECO STRATEGIC
INCOME FUND, a Massachusetts business trust (the "Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as a closed-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PNC Bank to provide custodian services,
and PNC Bank wishes to furnish custodian services, either directly or through an
affiliate or affiliates, as more fully described herein.
NOW, THEREFORE, In consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. DEFINITIONS. AS USED IN THIS AGREEMENT:
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(a) "1933 Act" means the Securities Act of 1933, as amended.
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(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
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(c) "Authorized Person" means any officer of the Fund and any other person
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duly authorized by the Fund's Board of Trustees to give Oral
Instructions and Written Instructions on behalf of the Fund and listed
on the Authorized Persons Appendix attached hereto and made a part
hereof or any amendment thereto as may be received by PNC Bank. An
Authorized Person's scope of authority may be limited by the Fund by
setting forth such limitation in the Authorized Persons Appendix.
(d) "Book-Entry System" means Federal Reserve Treasury book-entry system
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for
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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.
(e) "CEA" means the Commodities Exchange Act, as amended.
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(f) "Oral Instructions" mean oral instructions received by PNC Bank from
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an Authorized Person or from a person reasonably believed by PNC Bank
to be an officer of the Fund or one of the persons listed on the
Authorized Persons Appendix attached hereto (as the same may be
amended).
(g) "PNC Bank" means PNC Bank, National Association or a subsidiary or
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affiliate of PNC Bank, National Association.
(h) "SEC" means the Securities and Exchange Commission.
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(i) "Securities Laws" mean the 1933 Act, the 1934 Act, the 1940 Act and
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the CEA.
(j) "Shares" mean the shares of beneficial interest in the Fund.
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(k) "Property" means:
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(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 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.
(l) "Written Instructions" mean written instructions signed by two
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Authorized Persons and received by PNC Bank. The instructions may be
delivered by hand, mail, tested telegram, cable, telex, facsimile
sending device or electronic feed.
2. APPOINTMENT. The Fund hereby appoints PNC Bank to provide custodian
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services to the
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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
Board of Trustees, approving the appointment of PNC Bank or its
affiliates to provide custodian services to the Fund;
(b) a copy of the Fund's Registration Statement on Form N-2 under the 1933
Act and the 1940 Act filed with the SEC;
(c) a copy of the Fund's investment management and administration
agreement;
(d) a copy of the Fund's underwriting agreement; and
(e) certified or authenticated copies of any and all amendments or
supplements to the foregoing.
4. COMPLIANCE WITH LAWS.
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PNC Bank undertakes to comply with all applicable requirements of the
Securities Laws and any laws, rules and regulations of governmental
authorities having jurisdiction with respect to the 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.
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(a) Unless otherwise provided in this Agreement, PNC Bank shall act only
upon Oral Instructions and Written Instructions.
(b) PNC Bank shall be entitled to rely upon any Oral Instructions and
Written Instructions it receives from an Authorized Person (or from a
person reasonably believed by PNC Bank to be an officer of the Fund or
one of the persons listed on the Authorized Persons Appendix attached
hereto (as the same may be amended)) pursuant to this Agreement. PNC
Bank may assume that any Oral Instructions or
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Written Instructions received hereunder are not in any way
inconsistent with the provisions of organizational documents of the
Fund or of any vote, resolution or proceeding of the Fund's Board of
Trustees or of the Fund's shareholders, unless and until PNC Bank
receives Written Instructions to the contrary.
(c) The Fund agrees to forward to PNC Bank Written Instructions confirming
Oral Instructions (except where such Oral Instructions are given by
PNC Bank or its affiliates) 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. Where Oral Instructions or Written
Instructions reasonably appear to have been received from an
Authorized Person, PNC Bank shall incur no liability to the Fund in
acting upon such Oral Instructions or Written Instructions provided
that PNC Bank's actions comply with the other provisions of this
Agreement.
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
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should or should not take, PNC Bank may request directions or advice,
including Oral Instructions or Written Instructions, from the Fund.
(b) Advice of Counsel. If PNC Bank shall be in doubt as to any question
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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 investment
adviser or PNC Bank, at the option of PNC Bank).
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(c) Conflicting Advice. In the event of a conflict between directions,
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advice or Oral Instructions or Written Instructions PNC Bank receives
from the Fund, and the advice it receives from counsel, PNC Bank shall
be entitled to rely upon and follow the advice of counsel. In the
event PNC Bank so relies on the advice of counsel, PNC Bank remains
liable for any action or omission on the part of PNC Bank which
constitutes willful misfeasance, bad faith, gross negligence or
reckless disregard by PNC Bank of any duties, obligations or
responsibilities set forth in this Agreement.
(d) Protection of PNC Bank. PNC Bank shall be protected in any action it
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takes or does not take in reliance upon directions, advice or Oral
Instructions 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 Instructions or Written
Instructions. Nothing in this section shall be construed so as to
impose an obligation upon PNC Bank (i) to seek such directions, advice
or Oral Instructions or Written Instructions, or (ii) to act in
accordance with such directions, advice or Oral Instructions 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. Nothing in this subsection shall excuse
PNC Bank when an action or omission on the part of PNC Bank
constitutes willful misfeasance, bad faith, gross negligence or
reckless disregard by PNC Bank of any duties, obligations or
responsibilities set forth in this Agreement.
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7. RECORDS; VISITS. The books and records pertaining to the Fund, which are
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in the possession or under the control 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 and Authorized Persons shall have access to such
books and records at all times 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
representative 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 relating to the Fund and its shareholders, 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 such
information or records to duly constituted authorities.
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 effect
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with appropriate parties one or more agreements making reasonable
provisions 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. PNC Bank shall
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have no liability with respect to the loss of data or service interruptions
caused by equipment failure provided such loss or interruption is not
caused by PNC Bank's own willful misfeasance, bad faith, gross negligence
or reckless disregard of its duties or obligations under this Agreement.
11. COMPENSATION. As compensation for custody services rendered by PNC Bank
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during the term of this Agreement, the Fund will pay to PNC Bank a fee or
fees as may be agreed to in writing from time to time by the Fund and PNC
Bank.
12. INDEMNIFICATION. (a) The Fund agrees to indemnify and hold harmless PNC
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Bank and its affiliates from all taxes, charges, expenses, assessments,
claims and liabilities (including, without limitation, liabilities arising
under the Securities 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 or omission to act which PNC Bank takes (i) at the request or on the
direction of or in reliance on the advice of the Fund or (ii) upon Oral
Instructions or Written Instructions. Neither PNC Bank, nor any of its
affiliates, shall be indemnified against any liability (or any expenses
incident to such liability) arising out of PNC Bank's or its affiliates'
own willful misfeasance, bad faith, gross negligence or reckless disregard
of its duties under this Agreement.
(b) In order that the indemnification provisions contained in this Section
12 shall apply, upon the assertion of a claim for which the Fund may be required
to indemnify PNC Bank, PNC Bank shall promptly notify the Fund of such
assertion, and shall keep the Fund advised with respect to all material
developments concerning such claim. The Fund shall have the option to
participate with PNC Bank in the defense of such claim. Neither party shall
confess any claim or
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make any compromise in any case to which the indemnification provided for in
this Section 12 attaches except with the other party's prior written consent.
13. RESPONSIBILITY OF PNC BANK.
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(a) PNC Bank shall be under no duty to take any 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 efforts, within
reasonable limits, in performing services provided for under this
Agreement. PNC Bank shall be liable for any damages arising out of
PNC Bank's failure to perform its duties under this Agreement to the
extent such damages arise out of PNC Bank's willful misfeasance, bad
faith, gross negligence or reckless disregard of its duties under this
Agreement.
(b) Without limiting the generality of the foregoing or of any other
provision of this Agreement, (i) PNC Bank 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
Instruction 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) subject to section
10, 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, fire, flood, catastrophe,
acts of God, insurrection, war, riots or failure of the mails,
transportation, communication or power supply.
(c) Notwithstanding anything in this Agreement to the contrary, neither
PNC Bank
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nor its affiliates shall be liable 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 or its affiliates'
performance of the services provided hereunder, whether or not the
likelihood of such losses or damages was known by PNC Bank or its
affiliates.
14. DESCRIPTION OF SERVICES.
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(a) Delivery of the Property. The Fund will deliver or arrange for
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delivery to PNC Bank, all the Property owned by the Fund, including
cash received as a result of the distribution of 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
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Instructions, shall open and maintain separate accounts 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 of the Fund (collectively, the "Accounts") and shall
hold in the Accounts all cash received from or for the Accounts of the
Fund specifically designated to each separate series.
PNC Bank shall make cash payments from or for the Accounts 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-section (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;
(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;
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(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 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;
(vii) payments made to a sub-custodian pursuant to provisions in sub-
section (c) of this Section; and
(viii) 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
Accounts.
(c) Receipt of Securities; Subcustodians.
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(i) PNC Bank shall hold all securities received by it for the
Accounts 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 Board of Trustees, authorizing the
transaction. In no case may any member of the Fund's Board of
Trustees, or any officer, 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 United States
banks or trust companies to perform duties described in this sub-
section (c). Such bank or trust company shall have an aggregate
capital, surplus and
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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 be qualified to act as custodian and agree to comply with
the relevant provisions of the 1940 Act and other applicable
rules and regulations. Any such arrangement will not be entered
into without prior written notice to the Fund.
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 its own acts or omissions, under the standards of
care provided for herein, and the acts and omissions of any sub-
custodian chosen by PNC Bank under the terms of this sub-section
(c).
(d) Transactions Requiring Instructions. Upon receipt of Oral
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Instructions 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 Instructions 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;
(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;
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(vi) make such transfer or exchanges of the assets of the Fund and
take such other steps as shall be stated in said Oral
Instructions 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 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 address of
the person(s) to whom delivery shall be made when such action
is pursuant to sub-paragraph (xi).
(e) Use of Book-Entry System. The Fund shall deliver to PNC Bank
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certified resolutions of the Fund's Board of Trustees approving,
authorizing and instructing PNC Bank on a continuous 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
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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 Instructions or Oral
Instructions authorizing contrary actions.
PNC Bank shall administer the Book-Entry System as follows:
(i) With respect to securities of the Fund which are maintained in
the Book-Entry System, the records of PNC Bank shall identify
by Book-Entry or otherwise those securities belonging to the
Fund. PNC Bank shall furnish to 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.
(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 Authorized Persons, and PNC Bank will furnish to
the Fund all information in respect of the services rendered as
it may require.
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.
(f) Registration of Securities. All Securities held for the Fund which
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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 nominees of the Fund, PNC
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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 in the name of its nominee or
in the name of the Book-Entry System, any securities which it may hold
for the Accounts and which may from time to time be registered in the
name of the Fund.
(g) Voting and Other Action. Neither PNC Bank nor its nominee shall vote
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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 notices, proxies and proxy
soliciting materials to the registered holder of such securities. If
the registered holder is not the Fund on behalf of the Fund, then
Written Instructions or Oral Instructions must designate the person
who owns such securities.
(h) Transactions Not Requiring Instructions. In the absence of contrary
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Written Instructions, PNC Bank is authorized to take the following
actions:
(i) Collection of Income and Other Payments.
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(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;
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(C) receive and hold for the account of the Fund all securities
received as a distribution on the Fund's 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 securities belonging
to the Fund and 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.
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(A) 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
(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 Instructions 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 account of the Fund;
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(3) hold for the account of the Fund all stock dividends,
rights and similar securities issued with 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.
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(i) PNC Bank shall upon receipt of Written Instructions or Oral
Instructions establish and maintain a segregated account on its
records for and on behalf of the Fund. Such accounts 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 the maintenance of
segregated accounts by registered investment companies; and
(B) Upon receipt of Written Instructions, for other proper
corporate purposes.
(ii) 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 of 1986, as amended (including regulations
promulgated thereunder), 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
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upon receipt of Oral Instructions or Written Instructions from the
Fund or its investment advisers that specify:
(i) the name of the issuer and the title of the securities, including
CUSIP number if applicable;
(ii) the number of shares or the principal amount purchased and
accrued interest, if any;
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(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 Instructions or Written Instructions.
(k) Sales of Securities. PNC Bank shall settle sold securities upon
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receipt of Oral Instructions 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 and settlement;
(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 Instructions 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.
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(l) Reports; Proxy Materials.
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(i) PNC Bank shall furnish to 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 securities belonging to
the Fund with 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 disbursements;
(C) the reports required 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,
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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 shall 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 Fund as soon as
reasonably practicable whenever income due on securities is not
collected in due course and shall provide the Fund with periodic
status reports of such income collected after a reasonable time.
18
15. YEAR 2000. PNC Bank is in the process of undertaking such modifications as
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may appear to be reasonably necessary to enable its computer system to
process date-related data on and after January 1, 2000 with respect to the
services provided hereunder. PNC Bank will provide periodic reports to the
Fund regarding the status of its Year 2000 preparedness program.
16. DURATION AND TERMINATION. This Agreement shall be effective on the date
------------------------
first above written and shall continue in effect for an initial period of
two (2) years (the "Initial Term"). Thereafter, this Agreement shall
automatically renew for successive terms of one (1) year ("Renewal Terms");
provided, however, that this Agreement may be terminated on (i) its
anniversary date or (ii) on the date that is six (6) months from the
anniversary date by either party without penalty upon prior written notice
given to the other party 90 days in advance of the termination date.
During either the Initial Term or the Renewal Terms, this Agreement may also
be terminated on an earlier date by the Fund or PNC Bank for cause.
With respect to the Fund, cause shall mean PNC Bank's material breach of this
Agreement causing it to fail to substantially perform its duties under this
Agreement. In order for such material breach to constitute "cause" under this
Paragraph, PNC Bank must receive written notice from the Fund specifying the
material breach and PNC Bank shall not have corrected such breach within a 30-
day period.
With respect to PNC Bank, cause includes, but is not limited to, the failure
of the Fund to pay the compensation set forth in writing pursuant to Paragraph
11 of this Agreement after it has received written notice from PNC Bank
specifying the amount due and the Fund shall not have paid that amount within a
30-day period.
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Any notice of termination for cause shall be effective sixty (60) days from
the date of any such notice. Upon the termination hereof, the Fund shall pay to
PNC Bank such compensation as may be due for the period prior to the date of
such termination. Any termination effected shall not affect the rights and
obligations of the parties under Paragraphs 12 and 13 hereof.
PNC Bank shall not be required to make any delivery or payment of assets upon
termination 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 the Property as security for the
payment of such fees, compensation, costs and expenses.
17. 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 Airport Business Center, International Court 2, 000 Xxxxxxx Xxxxx,
Xxxxxx, Xxxxxxxxxxxx 00000, marked for the attention of the Custodian
Services Department (or its successor) (b) if to the Fund, at 00000
Xxxxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxx 00000, Attn: Xxxxxxx X. Xxxxxxx or (c)
if to neither of the foregoing, at such other address as shall have been
given by like notice to the sender of any such notice or other
communication by the other party. 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.
18. LIMITATION OF LIABILITY OF TRUSTEES AND SHAREHOLDERS. A copy of the Fund's
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20
Declaration of Trust is on file with the Secretary of the Commonwealth of
Massachusetts, and notice is hereby given that this Agreement is executed
on behalf of the Fund's Trustees as Trustees under the Declaration of Trust
and not individually. PNC Bank acknowledges and agrees that the
obligations of the Fund hereunder are not personally binding upon any of
the Trustees or shareholders of the Fund but are binding only upon property
of the Fund.
19. 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.
20. DELEGATION; ASSIGNMENT. PNC Bank may assign its rights and delegate its
----------------------
duties hereunder to any wholly-owned direct or indirect subsidiary of PNC
Bank, National Association, PNC Bank Corp., or PFPC Inc. provided that (i)
PNC Bank gives the Fund thirty (30) days' prior written notice; (ii) the
delegate (or assignee) is qualified under Section 17(f) (1) or (2) of the
1940 Act to act as custodian and agrees with PNC Bank and the Fund to
comply with all relevant provisions of the 1940 Act; and (iii) PNC Bank and
such delegate (or assignee) promptly provide such information as the Fund
may request, and respond to such questions as the Fund may ask, relative to
the delegation (or assignment), including (without limitation) the
capabilities of the delegate (or assignee).
21. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
22. FURTHER ACTIONS. Each party agrees to perform such further acts and
---------------
execute such further documents as are necessary to effectuate the purposes
hereof.
21
23. MISCELLANEOUS.
-------------
(a) Entire Agreement. 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 Oral
Instructions.
(b) Captions. 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.
(c) Governing Law. 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.
(d) Partial Invalidity. 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.
(e) Successors and Assigns. This Agreement shall be binding upon and
----------------------
shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
(f) Facsimile Signatures. The facsimile signature of any party to this
--------------------
Agreement shall constitute the valid and binding execution hereof by
such party.
22
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PNC BANK, NATIONAL ASSOCIATION
By:
------------------------------------------
Title:
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CONSECO STRATEGIC INCOME FUND
By:
------------------------------------------
Title:
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23
AUTHORIZED PERSONS APPENDIX
NAME (TYPE) SIGNATURE
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