EXHIBIT 99.2(g)
FORM OF
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INVESTMENT MANAGEMENT AND
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ADMINISTRATION
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AGREEMENT
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Between
CONSECO STRATEGIC INCOME FUND
and
CONSECO CAPITAL MANAGEMENT, INC.
THIS INVESTMENT MANAGEMENT AND ADMINISTRATION AGREEMENT is entered into as
of this ______ day of July, 1998, by and between Conseco Strategic Income Fund
(the "Fund"), a Massachusetts business trust, and Conseco Capital Management,
Inc. ("CCM"), an Indiana corporation (the "Parties").
WITNESSETH:
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WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as a closed-end management investment company; and
WHEREAS, CCM is registered as an investment adviser under the Investment
Advisers Act of 1940; and
WHEREAS, the Fund desires to retain CCM to render investment advice,
furnish portfolio management services, and provide administrative services to
the Fund, and CCM is willing to provide said services pursuant to the terms and
conditions set forth herein, directly or through other entities;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the Parties mutually agree as follows:
1. Employment; Duties of CCM. (a) The Fund hereby employs CCM as
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investment manager and administrator of the Fund. CCM hereby accepts such
employment and agrees to provide the services set forth herein in return for the
compensation under Paragraph 7.
(b) Subject to the supervision and direction of the Fund's Board of
Trustees (the "Trustees"), CCM shall provide a continuous investment program for
the Fund and shall, as part of its duties hereunder, (i) furnish investment
research and management with respect to the investment of the assets of the
Fund; (ii) determine from time to time securities or other investments to be
purchased, sold, retained or lent by the Fund; and (iii) maintain all books and
records with respect to portfolio transactions of the Fund.
(c) Subject to the supervision and direction of the Trustees, CCM
shall supervise the Fund's business and affairs and shall provide the services
required for the effective
administration of the Fund to the extent not otherwise provided by employees,
agents or contractors of the Fund. These services shall include:
(i) furnishing, without cost to the Fund, such office space,
equipment, facilities and personnel as needed in connection with the Fund's
operations; (ii) supervising the preparation and filing of all documents
required for compliance by the Fund with the federal and state securities laws;
(iii) monitoring and reporting on compliance by the Fund with its investment
policies and restrictions; (iv) furnishing clerical and bookkeeping services as
needed by the Fund in connection with its operation (including establishing
appropriate expense accruals, maintaining expense files and coordinating payment
of invoices); (v) maintaining such books and records required by the 1940 Act
not otherwise required to be maintained by another agent of the Fund; (vi)
assisting in the preparation and distribution of annual and other reports to
shareholders of the Fund; (vii) supervising the preparation and filing of any
federal, state and local income tax returns; (viii) preparing for meetings of
the Trustees and shareholders; (ix) permitting its directors, officers and
employees to serve, without compensation from the Fund, as Trustees or officers
of the Fund; (x) overseeing the determination and publication of the Fund's net
asset value per share in accordance with the Fund's policies, and (xi)
overseeing relations with, and the performance of, agents engaged by the Fund,
such as its transfer agent, accounting services agent, custodian, independent
accountants and legal counsel. Nothing contained herein shall be deemed to
relieve or deprive the Trustees of their responsibility for and control of the
conduct of the affairs of the Fund.
(d) CCM will place orders for the Fund either directly with the
issuer or with any broker or dealer. In placing orders with brokers and
dealers, CCM will attempt to obtain the best net results in terms of price and
execution. Consistent with this obligation, CCM may, in its discretion,
purchase and sell portfolio securities to and from brokers and dealers that
provide brokerage and research services. CCM may pay such brokers and dealers a
higher commission than may be charged by other brokers and dealers if CCM
determines in good faith that such commission is reasonable in relation to the
value of the brokerage and research services provided. This determination may
be viewed in terms either of the particular transaction or of the overall
responsibility of CCM to the Fund and its other clients.
(e) The administrative services provided hereunder will exclude (i)
portfolio custodial services provided by the Fund's custodian; (ii) transfer
agency services provided by the Fund's transfer agent, and (iii) accounting
services provided by the Fund's accounting services agent.
(f) CCM shall carry out its duties under this Agreement in accordance
with the Fund's stated investment objectives, policies, and restrictions, the
1940 Act and other applicable laws and regulations, and such other guidelines as
the Trustees may reasonably establish from time to time.
2. Delegation of Certain Administrative Duties. CCM may delegate to
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Conseco Services LLC, a limited liability company organized under the laws of
the State of Indiana, or to another sub-administrator agreeable to the Fund, the
performance of any or all of those duties set forth in Subparagraph 1.(c)
herein. CCM shall be responsible to the Fund for the acts and omissions of any
sub-administrator to the same extent as it is for its own acts and omissions.
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CCM shall compensate any sub-administrator retained pursuant to this Agreement
out of the fees it receives pursuant to Paragraph 7 below.
3. Independent Contractor Status; Services Not Exclusive. CCM shall, for
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all purposes herein, be deemed to be an independent contractor. The services to
be rendered by CCM pursuant to the provisions of this Agreement are not to be
deemed exclusive and CCM 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.
4. Furnishing of Information. (a) The Fund shall from time to time
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furnish or make available to CCM detailed statements of the investments and
assets of the Fund, information pertaining to the investment objectives and
needs of the Fund, financial reports, proxy statements, and such legal or other
information as CCM may reasonably request in connection with the performance of
its obligations hereunder.
(b) CCM will furnish the Trustees with such periodic and special
reports (including data on securities, economic conditions and other pertinent
subjects) as the Trustees may reasonably request.
5. Fund Records. In compliance with the requirements of Rule 31a-3
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under the 1940 Act, CCM agrees that all records which it maintains for the Fund
shall be the property of the Fund and shall be surrendered promptly to the Fund
upon request. CCM further agrees to preserve all such records for the periods
prescribed by Rule 31a-2 under the 1940 Act. CCM agrees that it will maintain
all records and accounts regarding the investment activities of the Fund in a
confidential manner. All such accounts or records shall be made available within
five (5) business days of request to the accountants or auditors of the Fund
during regular business hours at CCM's offices. In addition, CCM will provide
any materials reasonably related to the investment advisory services provided
hereunder as may be reasonably requested in writing by the designated officers
of the Fund or as may be required by any duly constituted authority.
6. Allocation of Costs and Expenses. (a) CCM shall pay the costs of
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rendering its services pursuant to the terms of this Agreement, other than the
costs of securities (including brokerage commissions, if any) purchased by the
Fund.
(b) The Fund shall bear all expenses of its operation not specifically
assumed by CCM. Expenses borne by the Fund shall include, but are not limited
to, (i) organizational and offering expenses of the Fund and expenses incurred
in connection with the issuance of shares of the Fund; (ii) fees of the Fund's
custodian, transfer agent and accounting services agent; (iii) costs and
expenses of pricing and calculating the net asset value per share for the Fund
and of maintaining the books and records required by the 1940 Act; (iv)
expenditures in connection with meetings of shareholders and Trustees, other
than those called solely to accommodate CCM; (v) compensation and expenses of
Trustees who are not interested persons of the Fund or CCM ("Disinterested
Trustees"); (vi) the costs of any liability, uncollectible items of deposit and
other insurance or fidelity bond; (vii) the cost of preparing, printing, and
distributing prospectuses and statements of additional information, any
supplements thereto, proxy statements, and reports for existing shareholders;
(viii) legal, auditing, and accounting fees; (ix) trade association dues; (x)
filing fees and expenses of registering and maintaining registration of shares
of the Fund under
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applicable federal and state securities laws; (xi) brokerage commissions; (xii)
taxes and governmental fees; and (xiii) extraordinary and non-recurring
expenses.
(c) To the extent CCM incurs any costs which are an obligation of the
Fund as set forth herein and to the extent such costs have been reasonably
rendered, the Fund shall promptly reimburse CCM for such costs.
7. Investment Management and Administration Fees. (a) As compensation for
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the advice and services rendered and the expenses assumed by CCM pursuant
hereto, the Fund shall pay to CCM a monthly fee at the annual rate of 0.90% of
the Fund's average weekly value of the total assets of the Fund minus the sum of
accrued liabilities (other than the aggregate indebtedness constituting
financial leverage).
(b) The investment advisory fee shall be accrued weekly by the Fund and
paid to CCM at the end of each calendar month.
(c) In case this Agreement becomes effective or terminates before the
end of any month, the investment advisory fee for that month shall be calculated
on the basis of the number of business days during which it is in effect for
that month.
8. Compliance with Applicable Law. Nothing contained herein shall be
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deemed to require the Fund to take any action contrary to (a) the Declaration of
Trust of the Fund, (b) the By-laws of the Fund, or (c) any applicable statute or
regulation. Nothing contained herein shall be deemed to relieve or deprive the
Trustees of their responsibility for and control of the conduct of the affairs
of the Fund.
9. Liability. (a) In the absence of willful misfeasance, bad faith or
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gross negligence on the part of CCM, or reckless disregard by CCM of its
obligations or duties hereunder, CCM shall not be subject to liability to the
Fund or 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.
(b) No provision of this Agreement shall be construed to protect any
Trustee or officer of the Fund, or any director or officer of CCM, from
liability to which such person would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence on the part of such person, or
reckless disregard by such person of obligations or duties hereunder.
(c) A copy of the Fund's 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 Trustees as Trustees and not
individually. CCM 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.
10. Term of Agreement. This Agreement shall become effective on the
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date above written and shall continue in effect for two years from such date
unless sooner terminated as hereinafter provided. Thereafter, this Agreement
shall continue in effect from year to year so long as such continuation is
approved at least annually by (i) the Trustees or by the vote of a majority of
the outstanding voting securities of the Fund, and (ii) the vote of a majority
of the
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Disinterested Trustees, with such vote being cast in person at a meeting called
for the purpose of voting on such approval.
11. Termination. This Agreement may be terminated at any time without
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payment of any penalty (a) by the Trustees or by vote of a majority of the
outstanding voting securities of the Fund, upon delivery of sixty (60) days'
written notice to CCM, or (b) by CCM upon ninety (90) days' written notice to
the Fund. This Agreement shall terminate automatically in the event of its
assignment.
12. Amendment of Agreement. This Agreement may only be modified or
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amended by mutual written agreement of the Parties hereto.
13. No Waiver. The waiver by any party of any breach of or default
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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.
14. Use of Name. In consideration of the execution of this Agreement,
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CCM hereby grants to the Fund the right to use the name "Conseco" as part of its
name. The Fund agrees that in the event this Agreement is terminated, it shall
immediately take such steps as are necessary to amend its name to remove the
reference to "Conseco."
15. Applicable Law. This Agreement shall be governed by and construed
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in accordance with the laws of the State of Indiana, except insofar as the 1940
Act may be controlling.
16. Definitions. For purposes of application and operation of the
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provisions of this Agreement, the terms "majority of the outstanding voting
securities," "interested persons," and "assignment" shall have the meaning as
set forth in the 1940 Act. In addition, when the effect of a requirement of the
1940 Act reflected in any provision of this Agreement is modified, interpreted
or relaxed by a rule, regulation or order of the Securities and Exchange
Commission, whether of special or of general application, such provision shall
be deemed to incorporate the effect of such rule, regulation or order.
17. Severability. The provisions of this Agreement shall be considered
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severable and if any provision 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 counterparts, each
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of which shall be an original, but all of which together shall constitute one
and the same instrument.
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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.
ATTEST: CONSECO STRATEGIC INCOME FUND
By:
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Xxxxx X. Xxxx, Esq. Xxxxxxx X. Xxxxxxx
President
ATTEST: CONSECO CAPITAL MANAGEMENT, INC.
By:
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Xxxxx X. Xxxx, Esq. Xxxxxxx X. Xxxxxxx
President
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