INVESTMENT ADVISORY AND SERVICES AGREEMENT
BY AND BETWEEN
AMERICAN EXPRESS CERTIFICATE COMPANY
AND
AMERICAN EXPRESS FINANCIAL CORPORATION
This Agreement made as of _________ 2002, between, American Express Certificate
Company (formerly IDS Certificate Company), a Delaware Corporation, hereinafter
called "Company", and American Express Financial Corporation, a Delaware
corporation, hereinafter called "AEFC".
Part One: INVESTMENT ADVICE AND OTHER SERVICES
(1) AEFC agrees that during the period of this Agreement, subject to
the terms and conditions herein set forth,
(a) to provide to the Company at its request investment advice,
statistical data and recommendations with respect to the
Company's investments in securities;
(b) to recommend and approve securities for purchase and sale by
the Company;
(c) to continually keep the Company advised, to the extent
considered by AEFC as necessary, on recommendations
respecting the retention or sale of securities owned by the
Company, provided that AEFC will purchase and sell short -
term investments such as treasury bills and commercial paper
on behalf of Company in accordance with authority delegated
by Company;
(d) to provide to the Company all administrative, accounting,
clerical, statistical and corporate services;
(e) to provide all customer, collection and other services of
whatever nature required in connection with the
administration of the affairs of Company;
(f) to provide or pay for all office equipment, furniture, and
office space as Company may require, and
(g) to pay all other expenses incurred by or on behalf of
Company except as provided in Part Three hereof and provided
that the foregoing shall not cover advice, services or
management contracted for by Company in other agreements
dealing with real estate mortgages, real estate, and home
improvement loans or dealing with transfer agency services
AEFC agrees to maintain an adequate organization of
competent persons to provide the services and to perform the
functions herein mentioned, such services and functions
being subject always to the direction and control of the
Board of Directors, the Executive Committee, and the
authorized officers of Company.
(2) AEFC agrees that the investment planning, investment advice and
management which it provides to the Company will be In accordance
with general investment policies of Company as set forth from
time to time by Company in its prospectuses and registration
statements filed with the United States Securities and Exchange
Commission.
Part Two: COMPENSATION TO INVESTMENT ADVISER
(1) Company agrees to pay to AEFC and AEFC agrees to accept from
Company in full payment for:
(a) all investment advice, management, material and other
services provided,
(b) for the use of all facilities and equipment, and
(c) for all expenses paid or reimbursed by AEFC as herein
provided, a fee for each calendar month of each year equal
to the total of 1/12th of each of the respective percentages
set forth below of the net assets of Company, to be computed
for each such month on the basis of book value of assets as
of the close of business on the last full business day of
the preceding month:
On the first $250 million of total book value of assets of Company......... .75%
On the next $250 million of total book value of assets of Company.......... .65%
On the next $250 million of total book value of assets of Company.......... .55%
On the next $250 million of total book value of assets of Company.......... .50%
On the total book value of assets of Company in excess of $1 billion...... .107%
provided that in computing total book value of assets of
Company, there shall be excluded therefrom, the book value
of real estate mortgages, real estate, property improvement
loans, and any other assets on which Company pays or with
respect to which is paid an advisory, service, or management
fee other than as herein provided.
Loans originated by bank or investment banks shall be
excluded from the computation of total book value of assets
for purposes of the previous calculation and, instead, the
fee for managing and servicing those loans shall be 0.35%.
The fee shall be payable monthly and shall equal 1/12th of
0.35%, computed for each month on the basis of book value of
the loans as of the close of business on the last full
business day of the preceding month.
(2) The fee provided for hereunder shall be paid in cash by Company
to AEFC within five (5) business days after the last day of each
month.
Part Three: ALLOCATION OF EXPENSES
(1) AEFC agrees to pay, cause to be paid or reimburse Company for all
its expenses during the period of this contract except:
(a) Fees payable to AEFC for the latter's services under this
Agreement.
(b) Fees, costs, expenses and allowances payable to any person,
firm or corporation for services under any agreement entered
into by Company covering the offering for sale, sale and
distribution of face-amount certificates issued by Company.
(c) Fees, costs, expenses and allowances payable or incurred by
Company in connection with the acquisition, management,
servicing or disposition of real estate mortgages, real
estate, or property improvement loans.
(d) Taxes of any kind payable by Company.
(e) Depositary and custodian fees incurred by Company.
(f) Brokerage commissions and charges in the purchase and sale
of Company assets.
(g) Fees and expenses for services not covered by other
agreements and provided to Company at its request, or by
requirement, by attorneys, auditors, examiners, and
professional consultants who are not officers or employees
of AEFC.
(h) Fees and expenses of directors of Company who are not
officers or employees of AEFC.
(i) Provisions for certificate reserves.
(j) Expenses of customer settlements not attributable to sales
function.
(k) Transfer agency fees and expenses.
Part Four: MISCELLANEOUS
(1) AEFC shall be deemed to be an independent contractor and, except
as expressly provided or authorized in the contract shall have no
authority to act for or represent Company.
(2) Company recognizes that AEFC now renders and may continue to
render investment advice and other services to other investment
companies which may or way not have investment policies and
investments similar to those of Company and that AEFC manages its
own investments and those of other subsidiaries. AEFC shall be
free to render such investment advice and other services and
Company hereby consents thereto.
(3) Neither this contract nor any transaction made pursuant thereto
shall be invalidated or in anywise affected by the fact that
directors, officers and agents of Company are or may be
interested in AEFC or any successor assignee thereof, as
directors, officers, stockholders or otherwise; that directors,
officers, stockholders or agents of AEFC are or may be interested
in Company as directors, officers, or otherwise; or that AEFC is
interested in Company as stockholder or otherwise.
(4) Any notice under this contract shall be given in writing,
addressed and delivered, or mailed postpaid to the party to this
Agreement entitled to receive such. at 200 AXP Financial Center,
Minneapolis, Minnesota, or to such other address as either party
may designate in writing mailed to the other.
(5) AEFC agrees that, except as herein otherwise expressly provided
or as may be permitted consistent with the use of a broker dealer
affiliate of AEFC under Section 15(f) of the Investment Company
Act of 1940 and other applicable provisions of the federal
securities laws, neither it nor any of its officers, directors or
employees shall at any time during the period of this agreement
make, accept, or receive directly or indirectly, any fees,
profits or emoluments of any character in connection with the
purchase or sale of securities (except securities issued by the
Company) or other assets by or for the Company.
Part Five: RENEWAL AND TERMINATION
(1) This Agreement shall continue in effect through December 31. 2002
and shall continue from year to year thereafter unless and until
terminated by either party as hereinafter provided, except that
such continuance after December 31, 1984 shall be specifically
approved at least annually (1) by the Board of Directors of
Company or by a vote of the majority of the outstanding voting
securities of Company and (2) by the vote of a majority of the
Directors who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called for
the purpose of voting on such approval. As used in this
paragraph, the term "interested person" shall have the same
meaning as set forth in the Investment Company Act of 1940, as
amended.
(2) This Agreement may be terminated by either Company or AEFC at any
time by giving the other party at least sixty days' previous
written notice of such intention to terminate; provided that any
such termination shall be made without the payment of any
penalty, and provided further that such termination may be
effected either by the Board of Directors of Company or by a vote
of the majority of the outstanding voting securities of Company.
(3) This Agreement shall terminate in the event of its assignment,
the term "assignment" for this purpose having the same meaning as
set forth in the Investment Company Act of 1940.
IN WITNESS WHEREOF the parties hereto have executed the foregoing agreement as
of the day and year first above written.
____________________________ __________________________
American Express Certificate American Express Financial
Company Corporation
