MANAGEMENT AGREEMENT
AGREEMENT to be effective the 1st day of July 1985, by and between BLC
TAX-EXEMPT BOND FUND, INC., a Maryland corporation (hereinafter called the
"Fund") and BLC EQUITY MANAGEMENT COMPANY, an Iowa corporation (hereinafter
called "Blemco").
W I T N E S S E T H:
WHEREAS, The Fund has furnished Blemco with copies properly certified
or authenticated of each of the following:
(a) Certificate of Incorporation of the Fund;
(b) Bylaws of the Fund as adopted by the Board of Directors;
(c) Resolutions of the Board of Directors of the Fund selecting
Blemco as investment adviser and approving the form of this
Agreement.
NOW THEREFORE, in consideration of the premises and mutual agreements
herein contained, the Fund hereby appoints Blemco to act as investment adviser
and manager of the Fund, and the Blemco agrees to act, perform or assume the
responsibility therefor in the manner and subject to the conditions hereinafter
set forth. The Fund will furnish Blemco from time to time with copies, properly
certified or authenticated, of all amendments of or supplements to the
foregoing, if any.
1. INVESTMENT ADVISORY SERVICES
Blemco will regularly perform the following services for the Fund:
(a) Provide investment research, advice and supervision;
(b) Provide investment advisory, research and statistical facilities
and all clerical services relating to research, statistical and
investment work;
(c) Furnish to the Board of Directors of the Fund (or any appropriate
committee of such Board), and revise from time to time as
economic conditions require, a recommended investment program for
the Fund's portfolio consistent with the Fund's investment
objective and policies;
(d) Implement such of its recommended investment program as the Fund
shall approve, by placing orders for the purchase and sale of
securities, subject always to the provisions of the Fund's
Certificate of Incorporation and Bylaws and the requirements of
the Investment Company Act of 1940, as each of the same shall be
from time to time in effect;
(e) Advise and assist the officers of the Fund in taking such steps
as are necessary or appropriate to carry out the decisions of its
Board of Directors and any appropriate committees of such Board
regarding the general conduct of the investment business of the
Fund; and
(f) Report to the Board of Directors of the Fund at such times and in
such detail as the Board may deem appropriate in order to enable
it to determine that the investment policies of the Fund are
being observed.
2. CORPORATE ADMINISTRATIVE SERVICES
In addition to the investment advisory services set forth in Section 1,
Blemco will perform the following corporate administrative services:
(a) Furnish the services of such of Blemco's officers and employees
as may be elected officers or directors of the Fund, subject to
their individual consent to serve and to any limitations imposed
by law;
(b) Furnish office space, and all necessary office facilities and
equipment, for the general corporate functions of the Fund (i.e.,
functions other than (i) underwriting and distribution of Fund
shares; (ii) custody of Fund assets, and (iii) transfer and
paying agency services); and
(c) Furnish the services of the supervisory and clerical personnel
necessary to perform the general corporate functions of the Fund.
(d) Determine the net asset value of the shares of the Fund's Capital
Stock as frequently as the Fund shall request, or as shall be
required by applicable law or regulations.
3. EXPENSES BORNE BY THE BLEMCO
Blemco will pay:
(a) The compensation and expenses of all officers and executive
employees of the Fund;
(b) The compensation and expenses of all directors of the Fund who
are persons affiliated with Blemco; and
(c) The expenses of the organization of the Fund, including its
registration under the Investment Company Act of 1940, and the
initial registration and qualification of its Capital Stock for
sale under the Securities Act of 1933 and the Blue Sky laws of
the states in which it initially qualifies.
4. COMPENSATION OF BLEMCO
For all services to be rendered and payments made as provided in
Sections 1, 2 and 3 hereof, the Fund will accrue daily and pay Blemco
within five days after the end of each calendar month a fee based on
the average of the values placed on the net assets of the Fund as of
the time of determination of the net asset value on each trading day
throughout the month in accordance with the following schedule.
Average Daily Net
Assets of the Fee as a Percentage of
BLC Tax-Exempt Bond Fund, Inc. Average Daily Net Assets
----------------------------- ------------------------
First $100,000,000 .04167%
Next 100,000,000 .03750%
Next 100,000,000 .03333%
Next 100,000,000 .02917%
Amount Over 400,000,000 .02500%
Net asset value shall be determined pursuant to applicable provisions
of the Certificate of Incorporation of the Fund. If pursuant to such
provisions the determination of net asset value is suspended, then for
the purposes of this Section 4 the value of the net assets of the Fund
as last determined shall be deemed to be the value of the net assets
for each day the suspension continues.
Blemco may, at its option, waive all or part of its compensation for
such period of time as it deems necessary or appropriate.
5. SERVICES FURNISHED AT COST BY BLEMCO
Blemco (in addition to the services to be performed by it pursuant to
Sections 1 and 2 hereof) will:
(a) Act as, and provide all services customarily performed by, the
transfer and paying agent of the Fund including, without
limitation, the following:
(i) preparation and distribution to shareholders of reports, tax
information, notices, proxy statements and proxies;
(ii) preparation and distribution of dividend and capital gain
payments to shareholders;
(iii)issuance, transfer and registry of shares, and maintenance
of open account system;
(iv) delivery, redemption and repurchase of shares, and
remittances to shareholders; and
(v) communication with shareholders concerning items (i), (ii),
(iii) and (iv) above.
In the carrying out of this function Blemco may contract with
others for data systems, processing services and other
administrative services.
(b) Use its best efforts to qualify the Capital Stock of the Fund for
sale in states and jurisdictions other than those in which
initially qualified, as directed by the Fund; and
(c) Prepare stock certificates, and distribute the same as requested
by shareholders of the Fund.
Blemco will maintain records in reasonable detail of the costs
(including a reasonable charge for administrative overhead) incurred by
it in the performance of the services set forth in this Section 5, and
at the end of each calendar month the Fund will reimburse the Blemco
for such costs.
6. EXPENSES BORNE BY FUND
(a) The Fund will pay, without reimbursement by Blemco, the following
expenses:
(i) Taxes, including in case of redeemed shares any initial
transfer taxes, and governmental fees (except with respect
to the Fund's organization and the initial qualification and
registration of its Capital Stock);
(ii) Portfolio brokerage fees and incidental brokerage expenses;
and
(iii)Interest.
(b) The Fund will pay, without reimbursement by Blemco except under
the circumstances set forth in Section 7, the following expenses:
(i) The fees of its independent auditor and its legal counsel,
incurred subsequent to the Fund's organization and the
initial qualification and registration of its Capital Stock;
(ii) The fees and expenses of the Custodian of its assets;
(iii)The fees and expenses of all directors of the Fund who are
not persons affiliated with Blemco; and
(iv) The cost of meetings of shareholders.
7. REIMBURSEMENT OF CERTAIN FUND EXPENSES
If in any fiscal year of the Fund the normal operating expenses of the
Fund chargeable to its income account shall exceed the lowest applicable
percentage of average net assets or income limitations prescribed by any
state in which Fund shares are qualified for sale, Blemco will pay the
Fund, as promptly as practical after the end of such year, an amount
equal to such excess. For purposes of this Section 7, "normal operating
expenses" shall include the Section 4 investment advisory fee, the
Section 5 monthly reimbursement, and the expenses enumerated in
subsection 6(b), but shall not include the expenses enumerated in
subsection 6(a).
8. AVOIDANCE OF INCONSISTENT POSITION
In connection with purchases or sales of portfolio securities for the
account of the Fund, neither Blemco nor any of Blemco's directors,
officers or employees will act as a principal or agent or receive any
commission.
9. LIMITATION OF LIABILITY OF BLEMCO
Blemco shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Fund in connection with the matters to
which this Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on Blemco's part in the
performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
10. DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall remain in force until the conclusion of the first
meeting of the shareholders of the Fund and if it is approved by a vote
of a majority of the outstanding voting securities of the Fund it shall
continue in effect until the next annual meeting of the Fund.
Thereafter, this Agreement shall continue in effect from year to year
provided that the continuance is specifically approved at least annually
either by the Board of Director of the Fund or by a vote of a majority
of the directors of the Fund who are not interested persons of the
Blemco, Bankers Life Company, or the Fund cast in person at a meeting
called for the purpose of voting on such approval. This Agreement may,
on sixty days written notice, be terminated at any time without the
payment of any penalty, by the Board of Directors of the Fund, by vote
of a majority of the outstanding voting securities of the Fund, or by
Blemco. This Agreement shall automatically terminate in the event of
its assignment. In interpreting the provisions of this Section 10, the
definitions contained in Section 2(a) of the Investment Company Act of
1940 (particularly the definitions of "interest persons", "assignment"
and "voting security") shall be applied.
11. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the
party against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement shall be
effective until approved by vote of the holders of a majority of the
Fund's outstanding voting securities and by vote of a majority of the
directors who are not interested persons of Blemco, Bankers Life Company
or the Fund cast in person at a meeting called for the purpose of voting
on such approval.
12. ADDRESS FOR PURPOSE OF NOTICE
Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address
as such other party may designate for the receipt of such notices. Until
further notice to the other party, it is agreed that the address of the
Fund and that of Blemco for this purpose shall be 000 Xxxx Xxxxxx, Xxx
Xxxxxx, Xxxx 00000.
13. MISCELLANEOUS
The captions in this Agreement are included for convenience of reference
only, and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. This Agreement may be
executed simultaneously 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized.
BLC TAX-EXEMPT BOND BLC EQUITY MANAGEMENT COMPANY
FUND, INC.
R. E. XXXXXX X. X. XXXXX
By __________________________________ By ___________________________________
R.E. Xxxxxx, President X.X. Xxxxx, President
