ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made the 13th day of November, 1996, by and between IDS Tax-Exempt
Bond Fund, Inc. (the "Corporation"), a Minnesota corporation, on behalf of its
underlying series fund: IDS Intermediate Tax-Exempt Fund (the "Fund"); and
American Express Financial Corporation, a Delaware corporation.
Part One: SERVICES
(1) The Corporation hereby retains American Express Financial Corporation, and
American Express Financial Corporation hereby agrees, for the period of this
agreement and under the terms and conditions hereinafter set forth, to furnish
the Fund continuously with all administrative, accounting, clerical,
statistical, correspondence, corporate and all other services of whatever nature
required in connection with the administration of the Fund as provided under
this agreement; and to pay such expenses as may be provided for in Part Three
hereof; subject always to the direction and control of the Board of Directors,
the Executive Committee and the authorized officers of the Corporation. American
Express Financial Corporation agrees to maintain an adequate organization of
competent persons to provide the services and to perform the functions herein
mentioned. American Express Financial Corporation agrees to meet with any
persons at such times as the Board of Directors deems appropriate for the
purpose of reviewing American Express Financial Corporation's performance under
this agreement.
(2) The Corporation agrees that it will furnish to American Express Financial
Corporation any information that the latter may reasonably request with respect
to the services performed or to be performed by American Express Financial
Corporation under this agreement.
(3) It is understood and agreed that in furnishing the Fund with the services as
herein provided, neither American Express Financial Corporation, nor any
officer, director or agent thereof shall be held liable to the Corporation (or
the Fund) or its creditors or shareholders for errors of judgment or for
anything except willful misfeasance, bad faith, or gross negligence in the
performance of its duties, or reckless disregard of its obligations and duties
under the terms of this agreement. It is further understood and agreed that
American Express Financial Corporation may rely upon information furnished to it
reasonably believed to be accurate and reliable.
Part Two: COMPENSATION FOR SERVICES
(1) The Corporation, on behalf of the Fund, agrees to pay to American Express
Financial Corporation, and American Express Financial Corporation covenants and
agrees to accept from the Corporation in full payment for the services
furnished, a fee based on the net assets of the Fund as set forth in the
following table:
Assets Annual Rate At
(Billions) Each Asset Level
First $1.0 0.040%
Next 1.0 0.035
Next 1.0 0.030
Next 3.0 0.025
Over 6.0 0.020
The administrative fee for each calendar day of each year shall be equal to
1/365th (1/366th in each leap year) of the total amount computed. The
computation shall be made for each such day on the basis of net assets as of the
close of business of the full business day two (2) business days prior to the
day for which the computation is being made. In the case of the suspension of
the computation of net asset value, the administrative fee for each day during
the suspension shall be computed as of the close of business on the last full
business day on which the net assets were computed. "Net assets" as of the close
of a full business day shall include all transactions in shares of the Fund
recorded on the books of the Fund for that day.
(2) The administrative fee shall be paid on a monthly basis and, in the event of
the termination of this agreement, the administrative fee accrued shall be
prorated on the basis of the number of days that this agreement is in effect
during the month with respect to which such payment is made.
(3) The administrative fee provided for hereunder shall be paid in cash to
American Express Financial Corporation within five (5) business days after the
last day of each month.
Part Three: ALLOCATION OF EXPENSES
(1) The Corporation, on behalf of the Fund, agrees to pay:
(a) Administrative fees payable to American Express Financial Corporation for
its services under the terms of this agreement;
(b) Taxes;
(c) Fees and charges of its independent certified public accountants for
services the Corporation requests;
(d) Fees and expenses of attorneys (i) it employs in matters not involving the
assertion of a claim by a third party against the Corporation, its directors and
officers, (ii) it employs in conjunction with a claim asserted by the Board of
Directors against American Express Financial Corporation, except that American
Express Financial Corporation shall reimburse the Corporation for such fees and
expenses if it is ultimately determined by a court of competent jurisdiction, or
American Express Financial Corporation agrees, that it is liable in whole or in
part to the Corporation (and/or the Fund) and (iii) it employs to assert a claim
against a third party;
(e) Fees paid for the qualification and registration for public sale of the
securities of the Fund under the laws of the United States and of the several
states in which such securities shall be offered for sale;
(f) Office expenses which shall include a charge for occupancy, insurance on the
premises, furniture and equipment, telephone, telegraph, electronic information
services, books, periodicals, published services and office supplies used by the
Corporation, equal to the cost of such incurred by American Express Financial
Corporation;
(g) Fees of consultants employed by the Corporation;
(h) Directors, officers and employees expenses which shall include fees,
salaries, memberships, dues, travel, seminars, pension, profit sharing and all
other benefits paid to or provided for directors, officers and employees,
directors and officers liability insurance, errors and omissions liability
insurance, worker's compensation insurance and other expenses applicable to the
directors, officers and employees, except the Corporation will not pay any fees
or expenses of any person who is an officer or employee of American Express
Financial Corporation or its affiliates;
(i) Filing fees and charges incurred by the Corporation in connection with
filing any amendment to its articles of incorporation, or incurred in filing any
other document with the State of Minnesota or its political subdivisions;
(j) Organizational expenses of the Fund;
(k) One-half of the Investment Company Institute membership dues charged jointly
to the IDS MUTUAL FUND GROUP and American Express Financial Corporation; and
(l) Expenses properly payable by the Corporation, approved by the Board of
Directors.
(2) American Express Financial Corporation agrees to pay all expenses associated
with the services it provides under the terms of this agreement. Further,
American Express Financial Corporation agrees that if, at the end of any month,
the expenses of the Fund under this agreement and any other agreement between
the Fund and American Express Financial Corporation, but excluding those
expenses set forth in (1)(b) of this Part Three, exceed the most restrictive
applicable state expense limitation, the Corporation shall not pay those
expenses set forth in (1)(a) and (c) through (m) of this Part Three to the
extent necessary to keep the Fund's expenses from exceeding the limitation, it
being understood that American Express Financial Corporation will assume all
unpaid expenses and xxxx the Corporation for them in subsequent months but in no
event can the accumulation of unpaid expenses or billing be carried past the end
of the Fund's fiscal year.
Until November 12, 1997, American Express Financial Corporation has agreed to
waive certain fees and to absorb certain fund expenses under this agreement. If,
at the end of any month, the fees and expense of the Fund's Class A Common
Stock, $0.01 par value per share (the "Class A Shares"), under this agreement
and any other agreement between the Fund and American Express Financial
Corporation exceed 0.90%, the Corporation shall not pay fees or expenses under
this agreement to the extent necessary to keep the expense ratio from exceeding
the limitation. In any month that fees and expenses of Class A Shares exceed
0.90%, all fees and expenses in excess of that limit will be returned to the
Fund. Any fee waiver or elimination of expenses will apply to each class on a
pro rata basis.
Part Four: MISCELLANEOUS
(1) American Express Financial Corporation shall be deemed to be an independent
contractor and, except as expressly provided or authorized in this agreement,
shall have no authority to act for or represent the Corporation.
(2) A "full business day" shall be as defined in the By-laws of the
Corporation.
(3) The Corporation recognizes that American Express Financial Corporation now
renders and may continue to render investment advice and other services to other
investment companies and persons which may or may not have investment policies
and investments similar to those of the Fund and that American Express Financial
Corporation manages its own investments and/or those of its
subsidiaries. American Express Financial Corporation shall be free to render
such investment advice and other services and the Corporation hereby consents
thereto.
(4) Neither this agreement nor any transaction had pursuant hereto shall be
invalidated or in anyway affected by the fact that directors, officers, agents
and/or shareholders of the Corporation are or may be interested in American
Express Financial Corporation or any successor or assignee thereof, as
directors, officers, stockholders or otherwise; that directors, officers,
stockholders or agents of American Express Financial Corporation are or may be
interested in the Corporation as directors, officers, shareholders, or
otherwise; or that American Express Financial Corporation or any successor or
assignee, is or may be interested in the Corporation as shareholder or
otherwise, provided, however, that neither American Express Financial
Corporation, nor any officer, director or employee thereof or of the
Corporation, shall sell to or buy from the Corporation any property or security
other than shares issued by the Corporation, except in accordance with
applicable regulations or orders of the United States Securities and Exchange
Commission.
(5) Any notice under this agreement shall be given in writing, addressed, and
delivered, or mailed postpaid, to the party to this agreement entitled to
receive such, at such party's principal place of business in Minneapolis,
Minnesota, or to such other address as either party may designate in writing
mailed to the other.
(6) American Express Financial Corporation agrees that no officer, director or
employee of American Express Financial Corporation will deal for or on behalf of
the Corporation with himself or herself as principal or agent, or with any
corporation or partnership in which he or she may have a financial interest,
except that this shall not prohibit officers, directors or employees of American
Express Financial Corporation from having a financial interest in the
Corporation or in American Express Financial Corporation.
(7) The Corporation agrees that American Express Financial Corporation may
subcontract for certain of the services described under this agreement with the
understanding that there shall be no diminution in the quality or level of the
services and that American Express Financial Corporation remains fully
responsible for the services.
(8) This agreement shall extend to and shall be binding upon the parties hereto,
and their respective successors and assigns; provided, however, that this
agreement shall not be assignable without the written consent of the other
party. This agreement shall be governed by the laws of the State of Minnesota.
Part Five: RENEWAL AND TERMINATION
(1) This agreement shall become effective on the date first set forth above and
shall continue in effect from year to year thereafter as the parties may
mutually agree; provided that either party may terminate this agreement by
giving the other party notice in writing specifying the date of such
termination, which shall be not less than 60 days after the date of receipt of
such notice.
(2) This agreement may not be amended or modified in any manner except by a
written agreement executed by both parties.
IN WITNESS THEREOF, the parties hereto have executed the foregoing agreement as
of the day and year first above written.
IDS TAX-EXEMPT BOND FUND, INC.
IDS INTERMEDIATE TAX-EXEMPT FUND
By: /s/ Xxxxxx X. Xxx
Xxxxxx X. Xxx
Vice President
AMERICAN EXPRESS FINANCIAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Vice President
