INVESTMENT ADVISORY AND SERVICES AGREEMENT
BY AND BETWEEN
AMERIPRISE CERTIFICATE COMPANY
AND
RIVERSOURCE INVESTMENTS, LLC
This Agreement made as of December 31, 2006, between Ameriprise Certificate
Company (formerly American Express Certificate Company) (the Company), a
Delaware corporation, hereinafter called "Company", and RiverSource
Investments, LLC (RiverSource Investments), a Minnesota limited liability
company.
PART ONE: INVESTMENT ADVICE AND OTHER SERVICES
(1) RiverSource Investments agrees during the period of this
Agreement, subject to the terms and conditions herein set
forth,
(a) to furnish the Company continuously with
investment advice;
(b) to determine, consistent with the Company's
investment policies, which securities in
RiverSource Investments' discretion shall be
purchased, held or sold, and to execute or cause
the execution of purchase or sell orders;
(c) to prepare and make available to the Company all
necessary research and statistical data in
connection therewith;
(d) to furnish all other services of whatever nature
required in connection with the management of
the Company as provided under this Agreement,
including but not limited to asset liability
management; and
(e) to provide to the Company all administrative
services necessary and appropriate for the
business of the Company, including but not
limited to:
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(i) Preparing all general or routine
shareholder communications including
notices of dividends;
(ii) Preparing and filing required
regulatory reports and communications;
(iii) Preparing and filing of tax reports,
including the Company's income tax
returns;
(iv) Executing the pricing process and
monitoring the reliability of the
valuation information received from
independent third-party pricing
services and brokers;
(v) Coordinating and supervising relations
with, and monitoring the performance
of, custodians, depositories, transfer
and pricing agents, accountants,
underwriters, brokers and dealers,
insurers, printers, Company's
auditors, and other persons serving
the Company, deemed to be necessary or
desirable;
(vi) Maintaining the Company's registration
statement updates, and maintaining
registration in the jurisdictions in
which Ameriprise certificates are
offered for sale;
(vii) Preparing reports, information,
surveys, or other analyses to third
parties as deemed necessary or
desirable by the Company; and
(viii) Preparing reports, evaluations,
information, surveys, statistical
analysis or other analysis of the
Company as the Board may request from
time to time.
(g) to provide to the Company accounting and
recordkeeping services necessary and appropriate
for the business of the Company, including but
not limited to:
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(i) Calculating and supervising
publication of the interest rates
applicable for face-amount
certificates issued by the Company and
other financial data, consistent with
federal securities laws and the
current prospectus for the face-amount
certificate products; and
(ii) Monitoring the Company's compliance
with accounting operations control
processes.
(h) to provide to the Company Treasury services
necessary and appropriate for the business of
the Company, including but not limited to:
(i) Monitoring daily cash and transaction
statements and reports from the
Company's transfer agent and
custodian; and
(ii) Completing daily cash reconciliations,
notifying Company's custodian of such
reconciliations, and reporting
investable cash to RiverSource
Investments, as directed by
RiverSource Investments.
(i) to provide all other services necessary and
appropriate for the operations of the Company,
not listed above, including but not limited to:
(i) Providing compliance services, as
directed by the Company's Chief
Compliance Officer, which may include
monitoring the Company's compliance
with applicable federal, state and
foreign securities laws, and the rules
and regulations thereunder, as
applicable, including, without
limitation, the Investment Company Act
of 1940, the Securities and Exchange
Act of 1934 and the Securities Act of
1933, each as amended from time to
time, and the rules promulgated under
each of the foregoing;
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(ii) Providing legal support of all
administration services provided by
RiverSource Investments under this
Agreement;
(iii) Maintaining the Company's books and
records in accordance with all
applicable federal and state
securities laws and regulations; and
(iv) Maintaining, together with affiliated
companies, maintenance of a business
continuation and recovery program for
the Company.
(2) RiverSource Investments agrees to maintain an adequate
organization of competent persons to provide the services
and to perform the functions herein mentioned and to
maintain adequate oversight over any service providers
hired to provide the services and to perform functions
herein mentioned.
(3) RiverSource Investments agrees to meet with any persons at
such times as the Board deems appropriate for the purpose
of reviewing RiverSource Investments' performance under
this Agreement. The Company agrees that RiverSource
Investments 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
services and also with the understanding, that RiverSource
Investments shall obtain such approval from the Fund's
Board and/or its shareholder as is required by law, rules
and regulations promulgated thereunder, terms of the
Agreement, resolutions of the Board and commitments of
RiverSource Investments.
(4) RiverSource Investments agrees that the investment advice
and investment decisions will be in accordance with
general investment policies of the Company as disclosed to
RiverSource Investments from time to time by the Company
and as set forth in the prospectuses and registration
statements filed with the United States Securities and
Exchange Commission (the SEC).
(5) RiverSource Investments agrees to provide such support as
required or requested by the Board in conjunction with
voting proxies solicited by or with respect to the issuers
of securities in which the Company's assets may be
invested from time to time.
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(6) RiverSource Investments agrees that it will maintain all
required records, memoranda, instructions or
authorizations relating to the management of the assets
for the Company including the acquisition or disposition
of securities, proxy voting and safekeeping of assets.
(7) The Company agrees that it will furnish to RiverSource
Investments any information that the latter may reasonably
request with respect to the services performed or to be
performed by RiverSource Investments under this Agreement.
(8) In selecting broker-dealers for execution, RiverSource
Investments will seek to obtain best execution for
securities transactions on behalf of the Company, except
where otherwise directed by the Board. In selecting
broker-dealers to execute transactions, RiverSource
Investments will consider not only available prices
(including commissions or xxxx-up), but also other
relevant factors such as, without limitation, the
characteristics of the security being traded, the size and
difficulty of the transaction, the execution, clearance
and settlement capabilities as well as the reputation,
reliability, and financial soundness of the broker-dealer
selected, the broker-dealer's risk in positioning a block
of securities, the broker-dealer's execution service
rendered on a continuing basis and in other transactions,
the broker-dealer's expertise in particular markets, and
the broker-dealer's ability to provide research services.
To the extent permitted by law, and consistent with its
obligation to seek best execution, RiverSource Investments
may execute transactions or pay a broker-dealer a
commission or markup in excess of that which another
broker-dealer might have charged for executing a
transaction provided that RiverSource Investments
determines, in good faith, that the execution is
appropriate or the commission or markup is reasonable in
relation to the value of the brokerage and/or research
services provided, viewed in terms of either that
particular transaction or RiverSource Investments' overall
responsibilities with respect to the Company and other
clients for which it acts as investment adviser.
RiverSource Investments shall not consider sale or
promotion of affiliated products, as a factor in the
selection of broker-dealers through which transactions are
executed.
(9) Except for bad faith, intentional misconduct or negligence
in regard to the performance of its duties under this
Agreement, neither RiverSource Investments, nor any of its
respective directors, officers, partners, principals,
employees, or agents shall be liable for any acts or
omissions or for any loss suffered by the Company.
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Each of RiverSource Investments, and its respective
directors, officers, partners, principals, employees and
agents, shall be entitled to rely, and shall be protected
from liability in reasonably relying, upon any information
or instructions furnished to it (or any of them as
individuals) by the Company or its agents which is
believed in good faith to be accurate and reliable. The
Company understands and acknowledges that RiverSource
Investments does not warrant any rate of return, market
value or performance of any assets of the Company.
Notwithstanding the foregoing, the federal securities laws
impose liabilities under certain circumstances on persons
who act in good faith and, therefore, nothing herein shall
constitute a waiver of any right which the Company may
have under such laws or regulations.
PART TWO: COMPENSATION TO RIVERSOURCE INVESTMENTS
(1) The Company agrees to pay to RiverSource Investments and
RiverSource Investments agrees to accept from the Company
in full payment for the services furnished, a fee as set
forth in Schedule A
(2) The fee shall be paid on a monthly basis and, in the event
of the termination of this Agreement, in whole or in part,
the 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 fee provided for hereunder shall be paid in cash by
the Company to RiverSource Investments within five (5)
business days after the last day of each month.
PART THREE: ALLOCATION OF EXPENSES
(1) The Company agrees to pay:
(a) Investment Management fees payable to
RiverSource Investments for its services under
the term of the Investment Advisory and Services
Agreement.
(b) Fees, costs, expenses and allowances payable to
any person, firm or corporation for services
under any agreement entered into by the Company
covering the offering for sale, sale and
distribution of face-amount certificates issued
by Company.
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(c) Fees, costs, expenses and allowances payable or
incurred by the Company in connection with the
acquisition, management, servicing or
disposition of real estate mortgages, real
estate, or property improvement loans, not
including the expenses related to services
provided by the Ameriprise Financial, Inc.'s
Real Estate Loan Management team for managing
and servicing such loans whose allocated costs
shall be borne by RiverSource Investments as the
latter costs are included in the base investment
advisory fee
(d) Taxes of any kind payable by the Company.
(e) Depositary and custodian fees incurred by the
Company.
(f) Brokerage commissions and charges in the
purchase and sale of the Company assets.
(g) Fees and expenses for services not covered by
other agreements and provided to the Company at
its request, or by requirement, by attorneys,
auditors, examiners, and professional
consultants who are not officers or employees of
RiverSource Investments.
(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 Company will not pay any
fees or expenses of any person who is an officer
or employee of RiverSource Investments or its
affiliates.
(i) Provisions for certificate reserves.
(j) Expenses of customer settlements not
attributable to sales function.
(k) Transfer agency fees and expenses.
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(l) Filing fees and charges incurred by the Company
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.
(m) Organizational expenses of the Company.
(n) Expenses properly payable by the Company,
approved by the Board.
(2) Except as provided in Paragraph (1) above, RiverSource
Investments agrees to pay the expenses it incurs in
providing services under this Agreement.
PART FOUR: MISCELLANEOUS
(1) RiverSource Investments 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 Company.
(2) The Company acknowledges that RiverSource Investments and
its affiliates may perform investment advisory services
for other clients so long as RiverSource Investments'
services to the Company under this Agreement are not
impaired thereby. RiverSource Investments and its
affiliates may give advice or take action in the
performance of duties to other clients that may differ
from advice given, or the timing and nature of action
taken, with respect to the Company, and that RiverSource
Investments and its affiliates may trade and have
positions in securities of issuers where the Company may
own equivalent or related securities, and where action may
or may not be taken or recommended for the Company.
Nothing in this Agreement shall be deemed to impose upon
the RiverSource Investments or any of its affiliates any
obligation to purchase or sell, or recommend for purchase
or sale for the Company, any security or any other
property that RiverSource Investments or any of its
affiliates may purchase, sell or hold for its own account
or the account of any other client. Notwithstanding any of
the foregoing, RiverSource Investments shall allocate
investment opportunities among its clients, including the
Company, in an equitable manner, consistent with its
fiduciary obligations. By reason of their various
activities, RiverSource Investments and its affiliates may
from time to time acquire information about various
corporations and their securities. The Company recognizes
that RiverSource Investments and its affiliates may not
always be free to divulge such
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information, or to act upon it.
(3) Neither this Agreement nor any transaction made pursuant
thereto shall be invalidated or in any way affected by the
fact that the Board members, officers, agents or the
shareholder of the Company are or may be interested in
RiverSource Investments or any successor assignee thereof
as directors, officers, stockholders or otherwise; that
directors, officers, stockholders or agents of RiverSource
Investments are or may be interested in Company as Board
members , officers, or otherwise; or that RiverSource
Investments or any successor or assignee is or may be
interested in the Company as a shareholder or otherwise,
provided however that neither RiverSource Investments, nor
any officer, Board member or employee thereof or of the
Company shall sell to or buy from the Company any property
or security other than securities issued by the Company,
except in accordance with applicable regulations or orders
of the SEC,
(4) 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.
(5) RiverSource Investments agrees that no officer, director
or employee of RiverSource Investments will deal for or on
behalf of the Company 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:
(a) Officers, directors or employees of RiverSource
Investments from having a financial interest in
the Company or RiverSource Investments.
(b) The purchase of securities for the Company, or
the sale of securities owned by the Company,
through a security broker or dealer, one or more
of whose partners, officers, directors or
employees is an officer, director or employee of
RiverSource Investments, provided such
transactions are handled in the capacity of
broker only and provided commissions charged do
not exceed customary brokerage charges for such
services.
(c) Transactions with the Company by a broker-dealer
affiliate of RiverSource Investments as may be
allowed by rule or order of the U.S. Securities
and Exchange Commission and if made pursuant to
procedures
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adopted by the Board.
(6) RiverSource Investments agrees that, except as herein
otherwise expressly provided or as may be permitted
consistent with the use of a broker-dealer affiliate of
RiverSource Investments under 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.
(7) Subject to the approval of a majority of the members of
the Company's Board of Directors, including a majority of
the Directors who are not "interested persons," as defined
in the Investment Company Act of 1940 ("1940 Act"),
RiverSource Investments may, through a subadvisory
agreement or other arrangement, delegate to any other
company that RiverSource Investments controls, is
controlled by, or is under common control with, or to
specified employees of any such companies, or to more than
one such company, to the extent permitted by applicable
law, certain of RiverSource Investments' duties enumerated
in Part One hereof; provided that RiverSource Investments
shall continue to supervise the services provided by such
company or employees and any such delegation shall not
relieve RiverSource Investments of any of its obligations
under this Agreement.
(8) All information and advice furnished by RiverSource
Investments to the Company under this Agreement shall be
confidential and shall not be disclosed to third parties,
except as required by law, order, judgment, decree, or
pursuant to any rule, regulation or request of or by any
government, court, administrative or regulatory agency or
commission, other governmental or regulatory authority or
any self-regulatory organization. All information
furnished by the Company to RiverSource Investments under
this Agreement shall be confidential and shall not be
disclosed to any unaffiliated third party, except as
permitted or required by the foregoing, where it is
necessary to effect transactions or provide other services
to the Company, or where the Company requests or
authorizes RiverSource Investments to do so. RiverSource
Investments may share information with its affiliates in
accordance with its privacy policies in effect from time
to time.
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(9) This Agreement shall be governed by the laws of the State
of Minnesota.
PART FIVE: RENEWAL AND TERMINATION
(1) This Agreement shall continue in effect through December
31, 2007 and shall continue from year to year thereafter
unless and until terminated by either party as hereinafter
provided, except that such continuance shall be
specifically approved at least annually (1) by the Board
or by a vote of the majority of the outstanding voting
securities of the Company and (2) by the vote of a
majority of the Board members 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 Act, as
amended, and the rules promulgated thereunder (the 1940
Act). As used in this agreement the term "majority of the
outstanding voting securities" shall have the same
meanings as set forth in the 1940 Act
(2) This Agreement may be terminated by either the Company or
RiverSource Investments at any time by giving the other
party sixty days' 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 or by a vote of the majority of the outstanding
voting securities of the 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 1940 Act.
(4) Non-material amendments or modifications to this Agreement
as may be permitted by the 1940 Act will only be made
effective upon written agreement executed by RiverSource
Investments and the Company upon approval by the Board.
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IN WITNESS WHEREOF, the parties hereto have executed the foregoing Agreement
as of the day and year first above written.
Ameriprise Certificate Company RiverSource Investments, LLC
/s/ Xxxxxxx X. Xxxxxxxx /s/ Xxxxxxxx Xxxxxx
-------------------------- -----------------------------
Xxxxxxx X. Xxxxxxxx Xxxxxxxx Xxxxxx
Title: President Title: Executive Vice President -
Equity and Fixed Income
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SCHEDULE A
The fee is based on net invested assets of the Company as set forth in the
following table:
----------------------------------------------------------------------------
Net invested assets Annual rate at each asset level
----------------------------------------------------------------------------
First $250 million 0.350%
----------------------------------------------------------------------------
Next $250 million 0.300%
----------------------------------------------------------------------------
Next $500 million 0.250%
----------------------------------------------------------------------------
Any amount over $1 billion 0.200%
----------------------------------------------------------------------------
The fee for each calendar month of each year equal to the total of 1/12th of
each of the respective percentages set forth above of the net invested
assets of the Company shall be computed for each such month on the basis of
the net invested assets at the close of business on last business day of
each month. Net invested assets will be determined using Generally Accepted
Accounting Principles (GAAP) and shall include the following items:
o Cash and cash equivalents
o Accounts receivable for interest and dividends and securities sold
o Accounts payables for invested assets purchased
o Securities available for sale (including any segregated assets)
o Trading securities
o Purchased equity index options
o Written equity index options
o Mortgages
Loans originated by banks 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.
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