PRINCIPAL UNDERWRITING AGREEMENT
Between CONSECO FUND GROUP
and
CONSECO EQUITY SALES, INC.
THIS PRINCIPAL UNDERWRITING AGREEMENT is entered into as of this
day of December, 1996, by and between Conseco Fund Group (the Trust ),
a Massachusetts business trust, and Conseco Equity Sales, Inc., a Texas
corporation (the Underwriter ).
WITNESSETH:
WHEREAS, the Trust is an open-end management investment company,
registered as such pursuant to the provisions of the Investment Company Act
of 0000 (xxx 0000 Xxx ), and its shares are registered pursuant to the
Securities Act of 0000 (xxx 0000 Xxx ) ;
WHEREAS, the Trust consists of the Equity, Asset Allocation and Fixed
Income Funds (the Funds, each a Fund ), which are diversified series of
the Trust operating as open-end management investment companies under the
1940 Act, and are currently divided into Class A and Class Y shares to be
offered to individual and institutional investors, respectively;
WHEREAS, the Underwriter is registered as a broker-dealer pursuant to
the provisions of the Securities Exchange Act of 0000 (xxx 0000 Xxx ), and
is a member in good standing of the National Association of Securities
Dealer, Inc. ( NASD );
WHEREAS, the Trust desires to have its Funds shares sold and
distributed through the Underwriter pursuant to the terms and conditions
set forth herein; and
WHEREAS, the Underwriter desires and has agreed to sell and
distribute those shares pursuant to the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises, covenants, conditions and agreements contained herein, and for
such other good and valuable consideration the receipt and sufficiency of
which are hereby acknowledged, the parties, each intending to be legally
bound hereby, mutually agree as follows:
1. Employment. The Trust hereby employs the Underwriter and the
Underwriter hereby accepts employment as the exclusive sales agent for
distribution of the shares, other than sales made directly by the Trust
without sales charge. The Underwriter agrees to use its best efforts to
promote the sale of the shares, but is not obligated to sell any specific
number of shares. The Trust agrees to deliver to the Underwriter such
shares as it may sell.
2. Independent Contractor. The Underwriter shall, for all
purposes herein, be deemed to be an independent contractor, and shall,
unless otherwise expressly provided and authorized, have no authority to
bind or obligate the Trust in any way, except that the Underwriter is
authorized to accept orders for the purchase or repurchase of shares as
sales agent of the Trust. The Underwriter may appoint sub-agents or
distribute shares through dealers or otherwise, as determined necessary or
desirable. It is expressly understood and agreed that the services to be
rendered by the Underwriter to the Trust pursuant to the provisions of this
Agreement are not to be deemed exclusive with respect to the Underwriter s
rendering of services, and the Underwriter shall therefore be free to
render similar or different services to others; provided that, its ability
to render the services described herein shall not be impaired thereby.
3. Furnishing of Information. The Trust shall furnish to the
Underwriter such information with respect to the Trust, the Funds and the
shares as the Underwriter may reasonably request. The Trust shall also
furnish such information and take such action as the Underwriter may
reasonably request in order to qualify the shares for sale to the public
under Blue Sky Laws in jurisdictions in which the Underwriter may wish to
offer them. The Trust shall furnish the Underwriter at least annually with
audited financial statements of its books and accounts certified by
i n d ependent public accountants and with such additional financial
information as the Underwriter may reasonably request from time to time.
4. Offering Price. The shares shall be offered at a price
equivalent to their net asset value plus, as appropriate, a variable
percentage of the public offering price as a sales load, as set forth in
each Fund s Prospectus. On each business day on which the New York Stock
Exchange ( NYSE ) is open for business, the Trust shall furnish the
Underwriter with the net asset value of the shares, which shall be
determined and become effective as of the close of business of the NYSE on
that day. The net asset value so determined shall apply to all orders for
the purchase of shares received by dealers prior to such determination and
the Underwriter is authorized in its capacity as agent to accept orders and
confirm sales at such net asset value; provided that, such dealers notify
the Underwriter of the time when they received the particular order and
that the order is placed with the Underwriter prior to its close of
business on the day on which the applicable net asset value is determined.
To the extent that the Trust s Transfer Agent (the Agent ) and the
Custodian(s) for any pension, profit-sharing, employer or self-employed
plan receive payments on behalf of the investors, such Agent and
Custodian(s) shall be required to record the time of such receipt with
respect to each payment, and the applicable net asset value shall be that
which is next determined and effective after the time of receipt. In all
events, the Underwriter shall forthwith notify all of the dealers
comprising its selling group and the Agent and Custodian(s) of the
effective net asset value as received from the Trust. Should the Trust at
any time calculate the net asset value more frequently than once each
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business day, procedures comparable to those set forth above shall be
followed with respect to such additional price.
5. Payment of Shares. All premiums and any other monies payable
upon the sale, distribution, renewal or other transaction involving the
shares shall be paid or remitted directly to the Trust which shall retain
all such premiums and monies for its own account. The Underwriter
acknowledges that all premiums collected by the Underwriter are held in a
fiduciary capacity on behalf of the Trust and are to be paid over to the
Trust as soon as possible immediately following receipt and collection.
6. Sales Commission. (a) The Underwriter shall be entitled to
receive a sales commission on the sale of shares in the amounts and
according to the procedures set forth in each Fund s prospectuses then in
effect under the 1933 Act.
(b) In addition to the payment of the sales commission
provided for in (a) above, the Underwriter may also receive reimbursement
for expenses or a maintenance or service fee as may be required by and
described in a distribution plan adopted by each Fund pursuant to Rule 12b-
1 under the 1940 Act.
(c) The Underwriter may allow appointed sub-agents or dealers
such commissions or discounts as deemed advisable, so long as any such
commissions or discounts are set forth in the Funds then current
prospectuses to the extent required by the applicable federal and state
securities laws.
(d) It is the sole prerogative of the Trust to establish
commission rates to be paid to the Underwriter and the Trust at all times
retains an ultimate veto as to commission rates to be paid.
7. Purchases for Underwriter s Own Account. The Underwriter
shall not purchase shares for its own account for the purpose of resale to
the public, but the Underwriter may purchase shares for its own investment
account upon written assurance that the purchase is for investment purposes
only and that the shares shall not be resold except through redemption by
the Trust.
8. Sale of Shares to Affiliates. The Underwriter may sell the
shares at net asset value (plus a varying sales charge as appropriate)
pursuant to a uniform offer described in the Funds current prospectuses to
(i) the Trustees, officers and investment adviser of the Trust and to the
Underwriter and affiliated companies thereof, (ii) the bona fide, full-time
employees or sales representatives of any of the foregoing who have acted
as such for at least ninety (90) days, (iii) any trust, pension, profit-
sharing or other benefit plan for such persons, or (iv) any other person
set forth in the Funds current prospectuses; provided that, such sales are
made in accordance with the rules and regulations of the 1940 Act and upon
the written assurance of the purchaser that the purchases are made for
investment purposes only, not for the purpose of resale to the public, and
that the shares will not be resold except through redemption by the Trust.
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9. Allocation of Expenses. (a) The Trust will pay the
following expenses in connection with the sale and distribution of shares
of the Funds:
(i) expenses pertaining to the preparation of audited
and certified financial statements to be included in any amendments
to the Registration Statements under the 1933 Act and 1940 Act,
i n c luding any Prospectuses and the Statements of Additional
Information included therein;
(ii) expenses pertaining to the preparation (including
legal fees) and printing of all amendments or supplements filed with
the Securities and Exchange Commission, including the copies of the
Prospectuses and Statements of Additional Information included in the
amendments, other than those necessitated by or related to the
Underwriter s activities where such amendments or supplements result
in expenses which the Trust would not otherwise have incurred;
(iii) expenses pertaining to the preparation, printing
a n d distribution of any reports or communications, including
Prospectuses and Statements of Additional Information, which are sent
to existing shareholders;
( i v) filing and other fees to federal and state
securities regulatory authorities necessary to register and maintain
registration of the shares; and
(v) expenses of the Agent, including all costs and
expenses in connection with the issuance, transfer and registration
of the shares, including but not limited to any taxes and other
government charges in connection therewith.
(b) Except to the extent that the Underwriter is entitled to
reimbursement under the provisions of any 12b-1 distribution plans, the
Underwriter shall pay the following expenses:
(i) expense of printing additional copies of the
Prospectuses and Statements of Additional Information and any
amendments or supplements thereto which are necessary to continue to
offer shares to the public;
(ii) expenses pertaining to the preparation (excluding
legal fees) and printing of all amendments and supplements to the
Registration Statements if the amendment or supplement arises from,
is necessitated by or related to the Underwriter s activities where
those expenses would not otherwise have been incurred;
(iii) expenses pertaining to the printing of additional
copies, for use by the Underwriter as sales literature, of reports or
other communications which have been prepared for distribution to
existing shareholders or expenses incurred by the Underwriter in
advertising, promoting and selling shares to the public.
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10. Conduct of Business. Other than currently effective
Prospectuses and Statements of Additional Information, the Underwriter
shall not issue any sales material or statements except literature or
advertising which conforms to the requirements of federal and state
securities laws and regulations and have been filed, where necessary, with
the appropriate regulatory authorities. The Underwriter shall furnish the
Trust with copies of all such material prior to its use and no such
material shall be published if the Trust reasonably and promptly objects.
11. Redemption or Repurchase within Seven Days. If shares are
tendered to the Trust for redemption or are repurchased by the Trust within
seven (7) business days after the Underwriter s acceptance of the original
purchase order for the shares, the Underwriter shall immediately refund to
the Trust the full amount of any sales commission (net of allowances to
dealers or brokers) allowed to the Underwriter on the original sale, and
shall promptly, upon receipt thereof, pay to the Trust any refunds from
dealers or brokers of the balance of sales commissions reallowed by the
Underwriter. The Trust shall notify the Underwriter of such tender for
redemption within ten (10) days of the day on which notice of such tender
for redemption is received by the Trust.
12. Suspension of Sales. The Trust shall have the ultimate
right to cease to offer and issue any shares available to the Underwriter
hereunder. The Trust reserves the right at all times to suspend or limit
the public offering of the shares upon written notice to the Underwriter
and to reject any order in whole or in part.
13. Liability. In the absence of willful misfeasance, bad faith,
gross negligence, or reckless disregard of obligations or duties hereunder
on the part of the Underwriter, the Underwriter shall not be subject to
liability to the Trust or to any of its shareholders for any act or
omission in the course of or in connection with rendering services
hereunder or for any losses that may be sustained in the purchase, holding
or sale of any security.
14. Term of Agreement. This Agreement shall become effective on
the date hereof and shall continue in effect for two years from such date
unless sooner terminated as hereinafter provided, and shall continue in
effect from year to year thereafter so long as such continuation is
approved at least annually by (i) the Trustees of the Trust or by the vote
of a majority of the outstanding voting securities of the Fund(s) and (ii)
the vote of a majority of the Trustees of the Trust who are not parties to
this Agreement or interested persons of any such party, with such vote
being cast in person at a meeting called for the purpose of voting on such
approval.
15. Termination. This Agreement may be terminated at any time
without payment of any penalty (a) by the Trustees of the Trust or by vote
of a majority of the outstanding voting securities of the Fund(s), upon
delivery of sixty (60) days written notice to the Underwriter, or (b) by
the Underwriter upon sixty (60) days written notice to the Trust. This
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Agreement shall terminate automatically in the event of any transfer or
assignment hereof.
16. No Waiver. The waiver by any party of any breach of or
default under any provision or portion of this Agreement shall not operate
as or be construed to be a waiver of any subsequent breach or default.
17. Severability. The provisions of this Agreement shall be
considered severable and if for any reason any provision of this Agreement
which is not essential to the effectuation of the basic purpose of this
Agreement is deemed to be invalid or contrary to any existing or future
law, such invalidity shall not impair the operation of or affect any other
provision of this Agreement which is valid.
18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
19. Entire Agreement. This Agreement represents the entire
understanding and agreement between the parties hereto with respect to the
subject matter hereof and supersedes all prior understandings or agreements
between the parties pertaining to the subject matter hereof, whether oral
or written. This Agreement may only be modified or amended by mutual
written agreement of the parties hereto and, as required, upon approval of
a majority of the outstanding voting securities of the Fund(s).
20. Definitions. For purposes of application and operation of
the provisions of this Agreement, the terms net asset value, offering
price, investment company, open-end investment company, assignment,
principal underwriter, interested person and majority of the
outstanding voting securities shall have the meanings set forth in the
1933 Act and 1940 Act, as applicable, and the rules and regulations
promulgated thereunder.
21. Notices. Any notice under this Agreement shall be in
writing, addressed and delivered or mailed postage prepaid to the other
party at the address such other party may designate from time to time for
the receipt of such notices.
22. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Indiana.
23. Limitations of Liability of the Trustees and Shareholders. A
copy of the Agreement and Declaration of Trust of the Trust is on file with
the Secretary of the Commonwealth of Massachusetts and notice is hereby
given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees, and not individually, and that the obligations of this
instrument are not binding upon any of the Trustees or Shareholders
individually but are binding only upon the assets and property of the Trust.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested by their duly authorized officers on the day
and year first above written.
CONSECO FUND GROUP
ATTEST:
By:
[title]
CONSECO EQUITY SALES, INC.
ATTEST:
By:
[title]
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