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ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made the 20th day of March, 1995, by and between IDS Special
Tax-Exempt Series Trust (the "Trust"), a Massachusetts business trust, on behalf
of its underlying series funds, and American Express Financial Corporation, a
Delaware corporation.
Part One: SERVICES
(1) The Trust 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 Trust continuously with all administrative, accounting, clerical,
statistical, correspondence, corporate and all other services of whatever nature
required in connection with the administration of the Trust 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 Trustees,
the Executive Committee and the authorized officers of the Trust. 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 Trustees deems appropriate for the purpose
of reviewing American Express Financial Corporation's performance under this
Agreement.
(2) The Trust 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 Trust with the services
as herein provided, neither American Express Financial Corporation, nor any
officer, trustee or agent thereof shall be held liable to the Trust 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 Trust agrees to pay to American Express Financial Corporation, and
American Express Financial Corporation covenants and agrees to accept from the
Trust in full payment for the services furnished, based on the net assets of the
Trust as set forth in the following table:
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Assets Annual Rate At
(Billions) Each Asset Level
Insured
First $1 0.040%
Next 1 0.035
Next 1 0.030
Next 3 0.025
Over 6 0.020
Massachusetts, Michigan
Minnesota, New York
and Ohio
First $0.25 0.040%
Next 0.25 0.035
Next 0.25 0.030
Next 0.25 0.025
Over 1 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
such suspension shall be computed as of the close of business on the last full
business day on which the net assets were computed. As used herein, "net assets"
as of the close of a full business day shall include all transactions in shares
of the Trust recorded on the books of the Trust 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 by the
Trust to American Express Financial Corporation within five (5) business days
after the last day of each month.
Part Three: ALLOCATION OF EXPENSES
(1) The Trust 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 Trust requests.
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(d) Fees and expenses of attorneys (i) it employs in matters not involving the
assertion of a claim by a third party against the Trust, its trustees and
officers, (ii) it employs in conjunction with a claim asserted by the Board of
Trustees against American Express Financial Corporation, except that American
Express Financial Corporation shall reimburse the Trust 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 Trust, 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 Trust 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 Trust, equal to the cost of such incurred by American Express Financial
Corporation.
(g) Fees of consultants employed by the Trust.
(h) Trustees, 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 trustees, officers and employees,
trustees and officers liability insurance, errors and omissions liability
insurance, worker's compensation insurance and other expenses applicable to the
trustees, officers and employees, except the Trust 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 Trust 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 Trust.
(k) One-half of the Investment Company Institute membership dues charged jointly
to the IDS MUTUAL FUND GROUP and American Express Financial Corporation.
(l) Expenses properly payable by the Trust, approved by the Board
of Trustees.
(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 Trust under this Agreement and any other agreement between
the Trust and American Express Financial Corporation, but excluding those
expenses set forth in (1)(b) of this Part Three, exceed the most restrictive
applicable state expenses limitation, the Trust shall
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not pay those expenses set forth in (1)(a) and (c) through (m) of this Part
Three to the extent necessary to keep the Trust's expenses from exceeding the
limitation, it being understood that American Express Financial Corporation will
assume all unpaid expenses and xxxx the Trust for them in subsequent months but
in no event can the accumulation of unpaid expenses or billing be carried past
the end of the Trust's fiscal year.
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 Trust.
(2) A "full business day" shall be as defined in the By-laws.
(3) The Trust 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 Trust 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 Trust hereby consents thereto.
(4) Neither this Agreement nor any transaction had pursuant hereto shall be
invalidated or in anyway affected by the fact that trustees, officers, agents
and/or shareholders of the Trust are or may be interested in American Express
Financial Corporation or any successor or assignee thereof, as trustees,
officers, stockholders or otherwise; that trustees, officers, stockholders or
agents of American Express Financial Corporation are or may be interested in the
Trust as trustees, officers, shareholders, or otherwise; or that American
Express Financial Corporation or any successor or assignee, is or may be
interested in the Trust as shareholder or otherwise, provided, however, that
neither American Express Financial Corporation, nor any officer, trustee or
employee thereof or of the Trust, shall sell to or buy from the Trust any
property or security other than shares issued by the Trust, 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, trustee or
employee of American Express Financial Corporation will deal for or on behalf of
the Trust with himself as principal or agent, or with any corporation or
partnership in which he may have a financial interest, except that this shall
not prohibit officers, trustees or employees of American Express Financial
Corporation from having a financial interest in the Trust or in American Express
Financial Corporation.
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(7) The Trust 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 (the
"Effective Date") 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 SPECIAL TAX-EXEMPT SERIES TRUST IDS Insured Tax-Exempt Fund IDS
Massachusetts Tax-Exempt Fund IDS Michigan Tax-Exempt Fund IDS Minnesota
Tax-Exempt Fund IDS New York Tax-Exempt Fund IDS Ohio Tax-Exempt Fund
By: /s/Xxxxxx X. Xxx
Xxxxxx X. Xxx
Vice President
AMERICAN EXPRESS FINANCIAL CORPORATION
By: /s/Xxxxx X. Xxxxxx
Vice President
