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CUSTODIAN AGREEMENT
THIS CUSTODIAN AGREEMENT made this 16th day of August, 1979,
between IDS High Yield Tax-Exempt Fund, Inc. a Nevada Corporation
(hereinafter also called the "Corporation") and First National Bank
of Minneapolis, a corporation organized under the laws of the
United States of America with its principal place of business at
Minneapolis, Minnesota (hereinafter also called the "Custodian").
WHEREAS, the Corporation desires that its securities and cash
be hereafter held and administered by Custodian pursuant to the
terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements
herein made, the Corporation and the Custodian agree as follows:
Section 1. Definitions
The word "securities" as used herein shall be construed to
include, without being limited to, shares, stocks, treasury stocks,
including any stocks of this Corporation, notes, bonds, debentures,
evidences of indebtedness, options to buy or sell stocks,
certificates of interest or participation in any profit-sharing
agreements, collateral trust certificates, preorganization
certificates or subscriptions, transferable shares, investment
contracts, voting trust certificates, certificates of deposit for a
security, fractional or undivided interests in oil, gas, or other
mineral rights, or any certificates of interest or participation
in, temporary or interim certificates for, receipts for, guarantees
of, or warrants or rights to subscribe to or purchase any of the
foregoing, acceptances and other obligations and any evidence of
any right or interest in or to any cash, property or assets and any
interest or instrument commonly known as a security.
The words "custodian order" shall mean a request or direction,
including a computer printout, directed to the Custodian and signed
in the name of the Corporation by any two individuals designated in
the current certified list referred to in Section 2.
The word "facsimile" shall mean an exact copy or likeness
which is electronically transmitted for instant reproduction.
Section 2. Names, Titles and Signatures of Authorized Persons
The Corporation will certify to the Custodian the names and
signatures of its present officers and other designated persons
authorized on behalf of the Corporation to direct the Custodian by
custodian order as hereinbefore defined. The Corporation agrees
that, whenever any change occurs in this list it will file with the
Custodian a copy of a resolution certified by the Secretary or an
Assistant Secretary of the Corporation as having been duly adopted
by the Board of Directors or the Executive Committee of the Board
of Directors of the Corporation designating those persons currently
authorized on behalf of the Corporation to direct the Custodian by
custodian order, as hereinbefore defined, and upon such filing (to
be accompanied by the filing of specimen signatures of the
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designated persons) the persons so designated in said resolution
shall constitute the current certified list. The Custodian is
authorized to rely and act upon the names and signatures of the
individuals as they appear in the most recent certified list from
the Corporation which has been delivered to the Custodian as
hereinabove provided.
Section 3. Use of Subcustodians
The Custodian may make arrangements, where appropriate, with
other banks having not less than two million dollars aggregate
capital, surplus and undivided profits for the custody of
securities. Any such bank selected by the Custodian to act as
subcustodian shall be deemed to be the agent of the Custodian.
Section 4. Receipt and Disbursement of Money
(1) The Custodian shall open and maintain a separate account
or accounts in the name of the Corporation or cause its agent to
open and maintain such account or accounts subject only to checks,
drafts or directives by the Custodian pursuant to the terms of this
Agreement. The Custodian or its agent shall hold in such account
or accounts, subject to the provisions hereof, all cash received by
it from or for the account of the Corporation. The Custodian or
its agent shall make payments of cash to or for the account of the
Corporation from such cash only:
(a) for the purchase of securities for the portfolio of the
Corporation upon the receipt of such securities by the
Custodian or its agent,
(b) for the purchase or redemption of shares of capital
stock of the Corporation,
(c) for the payment of interest, dividends, taxes,
management fees, or operating expenses (including,
without limitation thereto, fees for legal, accounting
and auditing services),
(d) for payment of distribution fees, commissions, or
redemption fees, if any,
(e) for payments in connection with the conversion,
exchange or surrender of securities owned or subscribed
to by the Corporation held by or to be delivered to the
Custodian,
(f) for payments in connection with the return of
securities loaned by the Corporation upon receipt of
such securities or the reduction of collateral upon
receipt of proper notice,
(g) for payments for other proper corporate purposes, or
(h) upon the termination of this Agreement.
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Before making any such payment for the purposes permitted
under the terms of items (a), (b), (c), (d), (e), (f) or (g) of
paragraph (1) of the Section, the Custodian shall receive and may
rely upon a custodian order directing such payment and stating that
the payment is for such a purpose permitted under these items (a),
(b), (c), (d), (e), (f) or (g) and that in respect to item (g), a
copy of a resolution of the Board of Directors or of the Executive
Committee of the Board of Directors of the Corporation signed by an
officer of the Corporation and certified by its Secretary or an
Assistant Secretary, specifying the amount of such payment, setting
forth the purpose to be a proper corporate purpose, and naming the
person or persons to whom such payment is made. Notwithstanding
the above, for the purposes permitted under items (a) or (f) of
paragraph (1) of this Section, the Custodian may rely upon a
facsimile order.
(2) The Custodian is hereby appointed the attorney-in-fact of
the Corporation to endorse and collect all checks, drafts or other
orders for the payment of money received by the Custodian for the
account of the Corporation and drawn on or to the order of the
Corporation and to deposit same to the account of the Corporation
pursuant to this Agreement.
Section 5. Receipt of Securities
Except as permitted by the second paragraph of this section,
the Custodian or its agent shall hold in a separate account or
accounts, and physically segregated at all times from those of any
other persons, firms or corporations, pursuant to the provisions
hereof, all securities received by it for the account of the
Corporation. The Custodian shall record and maintain a record of
all certificate numbers. Securities so received shall be held in
the name of the Corporation, in the name of an exclusive nominee
duly appointed by the Custodian or in bearer form, as appropriate.
Subject to such rules, regulations or guidelines as the
Securities and Exchange Commission may adopt, the Custodian may
deposit all or any part of the securities owned by the Corporation
in a securities depository which includes any system for the
central handling of securities established by a national securities
exchange or a national securities association registered with the
Securities and Exchange Commission under the Securities Exchange
Act of 1934, or such other person as may be permitted by the
Commission, pursuant to which system all securities of any
particular class or series of any issuer deposited within the
system are treated as fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of such securities.
All securities are to be held or disposed of by the Custodian
for, and subject at all times to the instructions of, the
Corporation pursuant to the terms of this Agreement. The Custodian
shall have no power or authority to assign, hypothecate, pledge or
otherwise dispose of any such securities, except pursuant to the
directive of the Corporation and only for the account of the
Corporation as set forth in Section 6 of this Agreement.
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Section 6. Transfer Exchange, Delivery, etc. of Securities
The Custodian shall have sole power to release or deliver any
securities of the Corporation held by it pursuant to this
Agreement. The Custodian agrees to transfer, exchange or deliver
securities held by it or its agent hereunder only:
(a) for sales of such securities for the account of the
Corporation, upon receipt of payment therefor;
(b) when such securities are called, redeemed, retired or
otherwise become payable;
(c) for examination upon the sale of any such securities in
accordance with "street delivery" custom which would
include delivery against interim receipts or other
proper delivery receipts;
(d) in exchange for or upon conversion into other
securities alone or other securities and cash whether
pursuant to any plan of merger, consolidation,
reorganization, recapitalization or readjustment, or
otherwise;
(e) for the purpose of exchanging interim receipts or
temporary certificates for permanent certificates;
(f) upon conversion of such securities pursuant to their
terms into other securities;
(g) upon exercise of subscription, purchase or other
similar rights represented by such securities;
(h) for loans of such securities by the Corporation upon
receipt of collateral;
(i) for other proper corporate purposes.
As to any deliveries made by the Custodian pursuant to items
(a), (b), (c), (d), (e), (f), (g) and (h), securities or cash
received in exchange therefore shall be delivered to the Custodian,
its agent, or to a securities depository. Before making any such
transfer, exchange, or delivery, the Custodian shall receive a
custodian order or a facsimile from the Corporation requesting such
transfer, exchange or delivery and stating that it is for a purpose
permitted under Section 6 (whenever a facsimile is utilized, the
Corporation will also deliver an original signed custodian order)
and, in respect to item (i), a copy of a resolution of the Board of
Directors or of the Executive Committee of the Board of Directors
of the Corporation signed by an officer of the Corporation and
certified by its Secretary or an Assistant Secretary, specifying
the securities, setting forth the purpose for which such payment,
transfer, exchange, or delivery is to be made, declaring such
purpose to be a proper corporate purpose, and naming the person or
persons to whom such transfer, exchange or delivery of such
securities shall be made.
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Section 7. Custodian's Acts Without Instructions
Unless and until the Custodian receives a contrary custodian
order from the Corporation, the Custodian shall or shall cause its
agent to:
(a) present for payment all coupons and other income items
held by the Custodian or its agent for the account of
the Corporation which call for payment upon
presentation and hold all cash received by it upon such
payment for the account of the Corporation;
(b) present for payment all securities held by it or its
agent which mature or when called, redeemed, retired,
or otherwise become payable;
(c) ascertain all stock dividends, rights and similar
securities to be issued with respect to any securities
held by the Custodian or its agent hereunder, and to
collect and hold for the account of the Corporation all
such securities;
(d) ascertain all interest and cash dividends to be paid to
security holders with respect to any securities held by
the Custodian or its agent, and to collect and hold
such interest and cash dividends for the account of the
Corporation.
Section 8. Voting and Other Action
Neither the Custodian nor any nominee of the Custodian shall
vote any of the securities held hereunder by or for the account of
the Corporation. The Custodian shall promptly deliver to the
Corporation all notices, proxies and proxy soliciting materials
with relation to such securities, such proxies to be executed by
the registered holder of such securities (if registered otherwise
than in the name of the Corporation), but without indicating the
manner in which such proxies are to be voted.
Custodian shall transmit promptly to the Corporation all
written information (including, without limitation, pendency of
calls and maturities of securities and expirations of rights in
connection therewith) received by the Custodian from issuers of the
securities being held for the Corporation. With respect to tender
or exchange offers, the Custodian shall transmit promptly to the
Corporation all written information received by the Custodian from
issuers of the securities whose tender or exchange is sought and
from the party (or his agents) making the tender or exchange offer.
Section 9. Transfer Taxes
The Corporation shall pay or reimburse the Custodian for any
transfer taxes payable upon transfers of securities made hereunder,
including transfers resulting from the termination of this
Agreement. The Custodian shall execute such certificates in
connection with securities delivered to it under this Agreement as
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may be required, under any applicable law or regulation, to exempt
from taxation any transfers and/or deliveries of any such
securities which may be entitled to such exemption.
Section 10. Custodian's Reports
The Custodian shall furnish the Corporation as of the close of
business each day a statement showing all transactions and entries
for the account of the Corporation. The books and records of the
Custodian pertaining to its actions as Custodian under this
agreement and securities held hereunder by the Custodian shall be
open to inspection and audit, at reasonable times, by officers of
the Corporation, internal auditors employed by the Corporation's
investment adviser, and independent auditors employed by the
Corporation. The Custodian shall furnish the Corporation in such
form as may reasonably be requested by the Corporation a list of
the securities held by it in custody for the account of the
Corporation as of the close of business on the last business day of
each month, which shall be certified by a duly authorized officer
of the Custodian. It is further understood that additional reports
may from time to time be requested by the Corporation. Should any
report ever be filed with any governmental authority pertaining to
lost or stolen securities, the Custodian will concurrently provide
the Corporation with a copy of that report.
The Custodian also shall furnish such reports on its systems
of internal accounting control as the Corporation may reasonably
request from time to time.
Section 11. Concerning Custodian
For its services hereunder the Custodian shall be paid such
compensation at such times as may from time to time be agreed on in
writing by the parties hereto in a Custodian Fee Agreement.
The Custodian shall not be liable for any action taken in good
faith upon any custodian order or facsimile herein described or
certified copy of any resolution of the Board of Directors or of
the Executive Committee of the Board of Directors of the
Corporation, and may rely on the genuineness of any such document
which it may in good faith believe to have been validly executed.
The Corporation agrees to indemnify and hold harmless
Custodian and its nominee from all taxes, charges, expenses,
assessments, claims and liabilities (including counsel fees)
incurred or assessed against it or its nominee in connection with
the performance of this Agreement, except such as may arise from
the Custodian's or its nominee's own negligent action, negligent
failure to act or willful misconduct. Custodian is authorized to
charge any account of the Corporation for such items. In the event
of any advance of cash for any purpose made by Custodian resulting
from orders or instructions of the Corporation, or in the event
that Custodian or its nominee shall incur or be assessed any taxes,
charges, expenses, assessments, claims or liabilities in connection
with the performance of this Agreement, except such as may arise
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from its or its nominee's own negligent action, negligent failure
to act or willful misconduct, any property at any time held for the
account of the Corporation shall be security therefor.
The Custodian shall maintain a standard of care equivalent to
that which would be required of a bailee for hire and shall not be
liable for any loss or damage to the Corporation resulting from
participation in a securities depository unless such loss or damage
arises by reason of any negligence, misfeasance, or willful
misconduct of officers or employees of the Custodian, or from its
failure to enforce effectively such rights as it may have against
any securities depository or from use of an agent, unless such loss
or damage arises by reason of any negligence, misfeasance, or
willful misconduct of officers or employees of the Custodian, or
from its failure to enforce effectively such rights as it may have
against any agent.
Section 12. Termination and Amendment of Agreement
The Corporation and the Custodian mutually may agree from time
to time in writing to amend, to add to, or to delete from any
provision of this Agreement.
The Custodian may terminate this Agreement by giving the
Corporation ninety days' written notice of such termination by
registered mail addressed to the Corporation at its principal place
of business.
The Corporation may terminate this Agreement at any time by
written notice thereof delivered, together with a copy of the
resolution of the Board of Directors authorizing such termination
and certified by the Secretary of the Corporation, by registered
mail to the Custodian.
Upon such termination of this Agreement, assets of the
Corporation held by the Custodian shall be delivered by the
Custodian to a successor custodian, if one has been appointed by
the Corporation, upon receipt by the Custodian of a copy of the
resolution of the Board of Directors of the Corporation certified
by the Secretary, showing appointment of the successor custodian,
and provided that such successor custodian is a bank or trust
company, organized under the laws of the United States or of any
State of the United States, having not less than two million
dollars aggregate capital, surplus and undivided profits. Upon the
termination of this Agreement as a part of the transfer of assets,
either to a successor custodian or otherwise, the Custodian will
deliver securities held by it hereunder, when so authorized and
directed by resolution of the Board of Directors of the
Corporation, to a duly appointed agent of the successor custodian
or to the appropriate transfer agents for transfer of registration
and delivery as directed. Delivery of assets on termination of
this Agreement shall be effected in a reasonable, expeditious and
orderly manner; and in order to accomplish an orderly transition
from the Custodian to the successor custodian, the Custodian shall
continue to act as such under this Agreement as to assets in its
possession or control. Termination as to each security shall
become effective upon delivery to the successor custodian, its
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agent, or to a transfer agent for a specific security for the
account of the successor custodian, and such delivery shall
constitute effective delivery by the Custodian to the successor
under this Agreement.
In addition to the means of termination hereinbefore
authorized, this Agreement may be terminated at any time by the
vote of a majority of the outstanding shares of the Corporation and
after written notice of such action to the Custodian.
Section 13. General
Nothing expressed or mentioned in or to be implied from any
provision of this Agreement is intended to, or shall be construed
to give any person or corporation other than the parties hereto,
any legal or equitable right, remedy or claim under or in respect
of this Agreement, or any covenant, condition or provision herein
contained, this Agreement and all of the covenants, conditions and
provisions hereof being intended to be and being for the sole and
exclusive benefit of the parties hereto and their respective
successors and assigns.
IN WITNESS WHEREOF, the Corporation and the Custodian have caused
this Agreement to be executed and their respective corporate seals
to be affixed hereto as of the date first above written by their
respective officers thereunto duly authorized.
Attest: IDS HIGH YIELD TAX-EXEMPT FUND, INC.
/s/ Xxxxxx X. Xxxxxxx By /s/ Xxxxxx X. Xxx
Assistant Secretary Vice President
Attest: FIRST NATIONAL BANK OF MINNEAPOLIS
/s/ Xxxxxxxx Xxxxxxxx By /s/ Xxxxxx Xxxxx
Trust Officer Vice President
