FUND ACCOUNTING AGREEMENT
AGREEMENT made as of this 2nd day of January, 1997, by and between CONSECO
SERVICES, LLC, an Indiana Limited Liability Company having its principal place
of business at 00000 Xxxxx Xxxxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxx 00000
(hereinafter called the "Company") and The Bank of New York, a New York
corporation authorized to do a banking business, having its principal place of
business at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (hereinafter called the
"Bank").
W I T N E S S E T H:
WHEREAS, the Company wishes the Bank to perform various services with
respect to the Conseco Fund Group, a Massachusetts business trust having its
principal place of business at 00000 Xxxxx Xxxxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxx
00000 (hereinafter called the "Fund"); and
WHEREAS, the Bank agrees to perform the services herein described on
the terms and conditions herein contained,
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the Company and the Bank hereby agree as follows:
1. The Company hereby appoints the Bank to perform the duties
hereinafter set forth.
2. The Bank hereby accepts appointment and agrees to perform the
duties hereinafter set forth.
3. Subject to the provisions of paragraphs 5 and 6 below, the Bank shall
compute the net asset value per share of the Fund and shall value the securities
held by the Fund (the "Securities") at such times and dates and in the manner
specified in the then currently effective Prospectus of the Fund. In the event
Schedule 1 hereto, as amended from time to time upon the agreement of the
Company and the Bank, specifies series of a Fund and/or classes of shares of the
Fund or of a series, all computations described with respect to the Fund or
shares of the Fund shall be made with respect to each series so specified and
the shares of each such series or such class.
4. Subject to the provisions of paragraphs 5 and 6 below, the Bank shall
also compute the net income of the Fund for dividend purposes and the net income
per share at such times and dates and in the manner specified in the then
currently effective Prospectus of the Fund.
5. To the extent valuation of Securities or computation of a net asset
value, net income for dividend purposes, or net income per share as specified in
the Company's then currently effective Prospectus is at any time inconsistent
with any applicable laws or regulations, the Fund shall immediately so notify
the Bank in writing and thereafter shall either furnish the Bank at all
appropriate times with the values of such Securities, net asset value, net
income for dividend purposes or net income per share, as the case may be, or
subject to the prior approval of the Bank, instruct the Bank in writing to value
Securities and compute net asset value, net income for dividend purposes, and
net income per share in a manner which the Company then represents in writing to
be consistent with all applicable laws and regulations. The Company may also
from time to time, subject to the prior approval of the Bank, instruct the Bank
in writing to compute the value of the Securities, the Fund's net asset value,
net income for dividend purposes, or net income per share in a manner other than
as specified in paragraphs 3 and 4 of this Agreement. The Company shall have
sole responsibility for determining the method of valuation of Securities and
the method of computing net asset value, net income for dividend purposes and
net income per share.
6. The Company shall furnish the Bank with any and all instructions,
explanations, information, specifications and documentation deemed necessary by
the Bank in the performance of its duties hereunder, including, without
limitation, the amounts or written formula for calculating the amounts and times
of accrual of Fund liabilities and expenses. The Company shall also furnish the
Bank with bid, offer, or market values of Securities if the Bank notifies the
Company that same are not available to the Bank from a security pricing or
similar service utilized, or subscribed to, by the Bank which the Bank in its
judgment deems reliable at the time such information is required for
calculations hereunder. At any time and from time to time, the Company also may
2
furnish the Bank with bid, offer, or market values of Securities and instruct
the Bank to use such information in its calculations hereunder. The Bank shall
at no time be required or obligated to commence or maintain any utilization of,
or subscriptions to, any securities pricing or similar service.
7. The Bank shall advise the Company and the Fund's transfer agent of the
net asset value, net income for dividend purposes, and net income per share upon
completion of the computations required to be made by the Bank pursuant to this
Agreement.
8. The Bank shall, as agent for the Company, maintain and keep current the
books, accounts and other documents (the "Records") the Fund is required to
maintain and preserve by the Investment Company Act of 1940, as amended, and the
rules and regulations thereunder (the "Rules") with respect to the computations
by the Bank under this Agreement. Such Records shall be preserved in accordance
with the Rules and shall be made available upon reasonable request for
inspection by officers, employees and auditors of the Company or Fund during the
Bank's normal business hours.
9. Records maintained and preserved by the Bank pursuant to this Agreement
shall be and remain the property of the Fund and shall be surrendered to the
Fund promptly upon request in the form in which such Records have been
maintained and preserved. Upon reasonable request of the Company or the Fund,
the Bank shall provide in hard copy or micro-film, whichever the Bank shall
elect, any Records included in any such delivery which are maintained by the
Bank on a computer disc, or are similarly maintained, and the Company shall
reimburse the Bank for its expenses of providing such hard copy or micro-film.
10. The Bank, in performing the services required of it under the terms of
this Agreement, shall be entitled to rely fully on the accuracy and validity of
any and all instructions, explanations, information, specifications and
documentation furnished to it by the Company and shall have no duty or
obligation to review the accuracy, validity or propriety of such instructions,
explanations, information, specifications or documentation, including, without
limitation, evaluations of Securities; the amounts or formula for calculating
3
the amounts and times of accrual of liabilities and expenses; the amounts
receivable and the amounts payable on the sale or purchase of Securities; and
amounts receivable or amounts payable for the sale or redemption of Fund shares
effected by or on behalf of the Fund. In the event the Bank's computations
hereunder rely, in whole or in part, upon information, including, without
limitation, bid, offer or market values of Securities or other assets, or
accruals of interest or earnings thereon, from a pricing or similar service
utilized, or subscribed to, by the Bank which the Bank in its judgment deems
reliable, the Bank shall not be responsible for, under any duty to inquire into,
or deemed to make any assurances with respect to, the accuracy or completeness
of such information.
11. The Bank shall not be required to inquire into any valuation of
Securities or other assets by the Company or the Fund or any third party
described in preceding paragraph 10 hereof, even though the Bank in performing
services similar to the services provided pursuant to this Agreement for others
may receive different valuations of the same or different securities of the same
issuers.
12. The Bank, in performing the services required of it under the terms of
this Agreement, shall not be responsible for determining whether any interest
accruable to the Fund is or will be actually paid, but will accrue such interest
until otherwise instructed by the Company.
13. The Bank shall not be responsible for delays or errors which occur by
reason of circumstances beyond its control in the performance of its duties
under this Agreement, including, without limitation, labor difficulties within
or without the Bank, mechanical breakdowns, flood or catastrophe, acts of God,
failures of transportation, loss or malfunction of utilities, computer (hardware
or software) or communications services, or other similar circumstances. Nor
shall the Bank be responsible for delays or failures to supply the information
or services specified in this Agreement where such delays or failures are caused
by the failure of any person(s) other than the Bank to supply any instructions,
explanations, information, specifications or documentation deemed necessary by
the Bank in the performance of its duties under this Agreement.
14. No provision of this Agreement shall prevent the Bank from offering
services similar or identical to those covered by this Agreement to any other
corporations, associations or entities of any kind. Any and all operational
procedures, techniques and devices developed by the Bank in connection with the
4
performance of its duties and obligations under this Agreement, including those
developed in conjunction with the Fund, shall be and remain the property of the
Bank, and the Bank shall be free to employ such procedures, techniques and
devices in connection with the performance of any other contract with any other
person whether or not such contract is similar or identical to this Agreement.
15. The Bank may, with respect to questions of law, apply to and obtain
the advice and opinion of counsel to the Company or the Fund or its own counsel
and shall be entitled to rely on the advice or opinion of such counsel. The
costs of any such advice or opinion shall be borne by the Company.
16. The Bank shall be entitled to rely upon any oral instructions received
by the Bank and reasonably believed by the Bank to be given by or on behalf of
the Fund, even if the Bank subsequently receives written instructions
contradicting such oral instructions. The books and records of the Bank with
respect to the content of any oral instruction shall be binding and conclusive.
17. The Bank shall not be liable for any loss, damage or expense,
including counsel fees and other costs and expenses of a defense against any
claim or liability, resulting from, arising out of, or in connection with its
performance hereunder, including its actions or omissions, the incompleteness or
inaccuracy of any specifications or other information furnished by the Company,
or for delays caused by circumstances beyond the Bank's control, unless such
loss, damage or expense arises out of the bad faith, negligence, or willful
misconduct of the Bank. In no event shall the Bank be liable to the Company or
any third party for special, indirect, or consequential damages, or for lost
profits or loss of business, arising under or in connection with this Agreement,
even if previously informed of the possibility of such damages and regardless of
the form of action.
18. Without limiting the generality of the foregoing, the Company shall
indemnify the Bank against and save the Bank harmless from any loss, damage or
expense, including counsel fees and other costs and expenses of a defense
against any claim or liability, arising from any one or more of the following:
5
(a) Errors in records or instructions, explanations, information,
specifications or documentation of any kind, as the case may be, supplied to the
Bank by any third party described in preceding paragraph 10 hereof or by the
Company by or on behalf of the Fund;
(b) Action or inaction taken or omitted to be taken by the Bank
pursuant to written or oral instructions of the Company or otherwise without bad
faith, negligence or willful misconduct;
(c) Any action taken or omitted to be taken by the Bank in good
faith in accordance with the advice or opinion of counsel for the Company or its
own counsel;
(d) Any improper use by the Company or its agents, distributor or
investment advisor of any valuations or computations supplied by the Bank
pursuant to this Agreement;
(e) The method of valuation of the Securities and the method of
computing net asset value, net income for dividend purposes, and net income
per share; or
(f) Any bid, offer, market value or other valuations of Securities,
net asset value, net income for dividend purposes, or net income per share
provided by the Company.
19. In consideration for all of the services to be performed by the Bank
as set forth herein the Bank shall be entitled to receive such reimbursement for
out-of-pocket expenses and such compensation as are specified on Exhibit A
hereto, as such Exhibit may be amended from time to time by the Bank and the
Company.
20. Attached hereto as Appendix A is a list of persons duly authorized by
the Board of Directors of the Company to execute this Agreement and give any
written or oral instructions, or written or oral specifications, by or on behalf
of the Company. From time to time the Company may deliver a new Appendix A to
add or delete any person and the Bank shall be entitled to rely on the last
Appendix A actually received by the Bank.
21. The Company represents and warrants to the Bank that it has all
requisite power to execute and deliver this Agreement, to give any written or
oral instructions contemplated hereby, and to perform the actions or obligations
6
contemplated to be performed by it hereunder, and has taken all necessary action
to authorize such execution, delivery, and performance. By giving any
instruction described in this Agreement to the Bank, the Company shall be deemed
to have represented that such instruction is consistent with all applicable laws
and regulations and the then currently effective Prospectus of the Fund.
22. This Agreement shall not be assignable by the Company without the
prior written consent of the Bank, or by the Bank without the prior written
consent of the Company.
23. Either of the parties hereto may terminate this Agreement by giving
the other party a notice in writing specifying the date of such termination,
which shall not be less than ninety (90) days after the date of giving of such
notice. Upon the date set forth in such notice, the Bank shall deliver to the
Company all Records then the property of the Fund and, upon such delivery, the
Bank shall be relieved of all duties and responsibilities under this Agreement.
24. This Agreement may not be amended or modified in any manner except by
written agreement executed on behalf of both parties hereto.
25. This Agreement is executed in the State of New York and all laws and
rules of construction of the State of New York (other than those relating to
choice of laws) shall govern the rights, duties and obligations of the parties
hereto.
26. The performance and provisions of this Agreement are intended to
benefit only the Bank and the Company, and no rights shall be granted to any
other person by virtue of this Agreement.
7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written above.
CONSECO SERVICES, LLC
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
Attest: President
/s/ Xxxx X. Xxxxxx
-------------------
Xxxx X. Xxxxxx
THE BANK OF NEW YORK
By: /s/ S. Grunston
---------------
XXXXXXX X. GRUNSTON
Vice President
Attest:
/s/ Xxxxxxxx XxXxxxxxxx
-----------------------
8
SCHEDULE 1
Series and Classes
SERIES CLASSES
------ -------
Equity Fund Class A
Class Y
Asset Allocation Fund Class A
Class Y
Fixed Income Fund Class A
Class Y
APPENDIX A
I, Xxxxxx X. Xxxxxx, of CONSECO SERVICES, LLC, (the "Company"), do
hereby certify that:
The following individuals serve in the following positions with Conseco
Capital Management, Inc. ("CCM"), the investment adviser to Conseco Fund Group,
and each has been duly elected or appointed by the Board of Directors of CCM to
each such position and qualified therefor in conformity with CCM's Charter and
By-Laws, and the signatures set forth opposite their respective names are their
true and correct signatures. Each such person is authorized to give written or
oral instructions or written or oral specifications by or on behalf of the
Company to the Bank.
Name Position Signature
---- -------- ---------
Xxxxxxx X. Xxxx Senior Vice President /s/ Xxxxxxx X. Xxxx
Xxxxxx X. Xxxxxxx Vice President /s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxxxx Assistant Vice President /s/ Xxxxxx X. Xxxxxxxxx
Xxxxxxxx Xxxx Xxxxxxxxx Xx. Investment Analyst /s/ Xxxxxxxx Xxxxxxxxx
EXHIBIT A
FUND ACCOUNTING FEE PROPOSAL
FOR
CONSECO FUND GROUP
Domestic Accounting Fee
4 basis points per annum, per fund, on the nest assets up to $100
million.
3 basis points on the next $100 million.
2 basis points on the excess over $200 million.
Minimum Fee
The minimum fee will be waived for the first three (3) months of operations. The
following minimums will apply thereafter:
4-12 months: $2,000 per month, per fund.
After one year: $3,500 per month, per fund.
Multiple Class Charges
$150.00 per month for each additional class added above two (2)
Out-of-Pocket Expenses
The cost of obtaining prices for daily security evaluations will be in addition
to the stated fees.
Billing Cycle
The above fees will be billed on a monthly basis.
Conseco Services, LLC The Bank of New York
Accepted by: /s/ Xxxxxx X. Xxxxxx Accepted by: /s/ S. Grunston
-------------------- ---------------
Xxxxxx X. Xxxxxx
Title: President Title: Xxxxxxx X. Grunston
------------------- -------------------
Vice President
Date: January 2, 1997 Date: 12/13/96
-------------------- -------------------
