CUSTODIAN AGREEMENT
THIS CUSTODIAN AGREEMENT made this 13th day of November, 1996, between IDS
Tax-Exempt Bond Fund, Inc. a Minnesota Corporation (hereinafter also called the
"Corporation"), on behalf of its underlying series fund: IDS Intermediate
Tax-Exempt Fund (the "Fund"); and First Bank National Association, a corporation
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 defined herein. 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 and upon such filing (to
be accompanied by the filing of specimen signatures of the 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, and as approved by
the Corporation, with other national 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 Fund 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 Fund. The Custodian or its agent shall make
payments of cash to or for the account of the Fund from such cash only:
(a) for the purchase of securities for the Fund upon the receipt of such
securities by the Custodian or its agent;
(b) for the purchase or redemption of the Fund's common stock;
(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 Fund held by or to be delivered to
the Custodian;
(f) for payments in connection with the return of securities loaned by the Fund
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.
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 this 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 Fund. The Custodian shall record and maintain a record of all certificate
numbers. Securities so received shall be held in the name of the Fund, 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 United States
Securities and Exchange Commission may adopt, the Custodian may deposit all or
any part of the securities owned by the Fund 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.
Section 6. Transfer Exchange, Delivery, etc. of Securities
The Custodian shall have sole power to release or deliver any securities of
the Fund 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 Fund, 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.
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 Fund which call for payment upon
presentation and hold all cash received by it upon such payment for the account
of the Fund;
(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 Fund 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 Fund.
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 Fund. 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 Fund. 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 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
Fund. 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 Fund 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. 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 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 Fund 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 Fund 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 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 authorized hereunder, this agreement
may be terminated at any time by the vote of a majority of the outstanding
shares of the Fund 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.
This agreement shall be governed by the laws of the State of Minnesota.
IN WITNESS WHEREOF, the Corporation and the Custodian have caused this
agreement to be executed as of the date first above written by their respective
officers thereunto duly authorized.
IDS TAX-EXEMPT BOND FUND, INC.
IDS INTERMEDIATE TAX-EXEMPT FUND
By /s/ Xxxxxx X. Xxx
Xxxxxx X. Xxx
Vice President
FIRST BANK NATIONAL ASSOCIATION
By /s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
Vice President
