INVESTMENT SERVICE AGREEMENT
THIS INVESTMENT SERVICE AGREEMENT, effective July 1, 1985 by and between
BLC TAX-EXEMPT BOND FUND, INC.(the "Fund"), an open-end investment company
formed under the laws of Maryland, BLC EQUITY MANAGEMENT COMPANY ("Blemco"), an
Iowa corporation and BANKERS LIFE COMPANY ("The Bankers Life"), a specially
chartered Iowa life insurance company;
WITNESSETH:
WHEREAS, The Bankers Life has organized Blemco to serve as an investment
adviser and is the owner (through its subsidiaries) of all of the outstanding
stock of Blemco; and
WHEREAS, Blemco and the Fund have entered into a Management Agreement
whereby Blemco undertakes to furnish the Fund with investment advisory services
and certain other services; and
WHEREAS, The Bankers Life is willing to make available to Blemco on a
part-time basis certain employees and services of The Bankers Life for the
purpose of better enabling Blemco to fulfill its investment advisory obligations
under the Management Agreement, provided that Blemco bears all costs allocable
to the time spent by them on the affairs of Blemco, and Blemco and the Fund
believe that such an arrangement will be for their mutual benefit:
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. Blemco shall have the right to use, on a part-time basis, and The
Bankers Life shall make available on such basis, such employees of The Bankers
Life and for such periods as may be agreed upon by Blemco and The Bankers Life,
as reasonably needed by Blemco in the performance of its investment advisory
services (but not its administrative, transfer and paying services) under the
Management Agreement. The Bankers Life will also make available to Blemco or the
Fund such clerical, stenographic and administrative services as Blemco may
reasonably request to facilitate its performance of such investment advisory
services.
2. The employees of The Bankers Life in performing services for Blemco
hereunder may, to the full extent that they deem appropriate, have access to and
utilize statistical and economic data, investment research reports and other
material prepared for or contained in the files of the Investment Department of
The Bankers Life which is relevant to making investments for the Fund, and may
make such materials available to Blemco; provided, that any such materials
prepared or obtained in connection with a private placement or other non-public
transaction need not be made available to Blemco if The Bankers Life deems such
materials confidential.
3. Employees of The Bankers Life performing services for Blemco pursuant
hereto shall report and be responsible solely to the officers and directors of
Blemco or persons designated by them. The Bankers Life shall have no
responsibility for investment recommendations and decisions of Blemco based upon
information or advice given or obtained by or through such employees.
4. The Bankers Life will, to the extent requested by Blemco, supply to
employees of Blemco (including part-time employees of The Bankers Life serving
Blemco) such clerical, stenographic and administrative services and such office
supplies and equipment as may be reasonably required in order that they may
properly perform their respective functions on behalf of Blemco in connection
with its performance of its investment advisory services under the Management
Agreement.
5. The obligation of performance under the Management Agreement is solely
that of Blemco, and The Bankers Life undertakes no obligation in respect
thereto, except as otherwise expressly provided herein.
6. In consideration of the services to be rendered by The Bankers Life and
its employees pursuant to this Investment Service Agreement, Blemco agrees to
reimburse The Bankers Life for such costs, direct and indirect, as may be fairly
attributable to the services performed for Blemco. Such costs shall include, but
not be limited to, an appropriate portion of:
(a) salaries;
(b) employee benefits;
(c) general overhead expense;
(d) supplies and equipment; and
(e) a charge in the nature of rent for the cost of space in The Bankers
Life offices fairly allocable to activities of Blemco under the
Management Agreement.
In the event of disagreement between Blemco and The Bankers Life as to a
fair basis for allocating or apportioning costs, such basis shall be fixed by
the public accountants for the Fund.
7. This Investment Service 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 Directors of the Fund or by a vote of a majority of the outstanding
voting securities of the Fund, and in either event by vote of a majority of the
directors of the Fund who are not interested persons of Blemco, The Bankers
Life, 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 7, the definitions contained in Section 2(a) of the Investment Company
Act of 1940 (particularly the definitions of "interested person", "assignment"
and "voting security") shall be applied.
8. Any notice under this Investment Service Agreement shall be in writing,
addressed and delivered or mailed postage prepaid to the other parties at such
addresses as such other parties may designate for the receipt of such notices.
Until further notice it is agreed that the address of the Fund, that of Blemco
and that of The Bankers Life for this purpose shall be 000 Xxxx Xxxxxx, Xxx
Xxxxxx, Xxxx 00000.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed in three counterparts by their duly authorized officers the day and
year first above written.
BLC TAX-EXEMPT BOND FUND, INC.
R. E. Xxxxxx
By __________________________________________
R. E. Xxxxxx, President
BLC EQUITY MANAGEMENT COMPANY
X. X. Xxxxx
By __________________________________________
X. X. Xxxxx, President
BANKERS LIFE COMPANY
X. X. Xxxxxx
By __________________________________________
X. X. Xxxxxx, President and Chief
Executive Officer
