INVESTMENT ADVISORY AGREEMENT
Agreement effective the 9th day of May, 2001, by and between IDS Life Insurance
Company (IDS Life) and American Express Financial Corporation (AEFC).
WHEREAS IDS Life has heretofore organized six companies, and such companies have
been registered as investment companies under the Investment Company Act of 1940
(such companies being referred to collectively as the "Funds" and individually
as the "Fund"), and may in the future organize one or more additional Funds;
WHEREAS AEFC has a staff of experienced investment personnel and facilities for
the kind of investment portfolio contemplated for such Fund or Funds;
NOW THEREFORE, it is mutually agreed:
1. Funds to Which Applicable. This agreement shall only be effective to any
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Fund in respect of which:
a. IDS Life has notified AEFC in writing to include such Fund under the
terms of this agreement; and
b. IDS Life has an existing legal duty to provide investment management
for such Fund; and
c. To the extent required by the Investment Company Act of 1940, this
agreement has been approved by a vote of the persons having an interest
in such Fund or an exemptive order from such requirement of approval
has been obtained from the Securities and Exchange Commission; and
continuance of its applicability is approved as required by the
Investment Company Act of 1940; and
d. The applicability of this agreement has not been terminated as provided
in paragraph 8 hereof.
2. Investment Advice. AEFC will continuously keep under observation the
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investment portfolio and investment objectives of any Fund covered by the
terms of this agreement and will, with respect to such Fund, continuously
furnish to IDS Life (1) assistance and advice in investment planning, (2)
recommendations as to particular purchases and sales of securities, and (3)
information as to economic and market factors and other information
relating to the investment plans of and the particular investment held in
any such Fund.
3. Information Furnished to AEFC. IDS Life shall furnish such information to
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AEFC as to holdings, purchases, and sales of securities under its
management and investment portfolio requirements as will reasonably enable
AEFC to furnish the investment advice under this agreement.
4. Furnishing Advice, Information and Notices. The advice, information,
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reports, etc., furnished under this agreement to IDS Life and any notice
under this agreement shall be furnished to the President of IDS Life or to
the person or persons designated in writing by him or by a person to whom
he has delegated the authority to so designate. Any information or notice
provided to AEFC under the terms of this agreement shall be furnished to
the President of AEFC or to the person or persons designated in writing by
him or by a person to whom he has delegated the authority to so designate.
5. Purchase and Sale of Securities. IDS Life may, in its discretion, direct
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purchase or sale orders to AEFC which will then place any such order with a
broker or brokers or negotiate such executions. All transactions will be
executed in a manner and in accordance with the procedures and standards as
set forth in, or as established in accordance with, the investment
management agreement between IDS Life and such Fund. IDS Life shall furnish
AEFC with information concerning such procedures and standards, and any
amendments thereto; and AEFC will maintain records to assure that such
transactions have been executed in accordance therewith. It is understood
that IDS Securities Corporation, a subsidiary of AEFC and a member firm of
the Pacific Stock Exchange, may participate in brokerage commissions
generated by any security transactions under this agreement, and that other
broker dealer affiliates of AEFC may be used to the extent consistent with
Section 15(f) of the Investment Company Act of 1940 and other applicable
provisions of the Federal securities laws.
6. Compensation to AEFC. The fee for the services provided by this agreement
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will be determined as follows:
a. The Fund shall pay the Company a fee for each calendar day of each year
equal to the total of 1/365th (1/366th in each leap year) of a
percentage of the net assets of the Fund as shown on attached Schedule
A, to be computed for each such day on the basis of net assets as of
the close of business on the next preceding full business day. In the
case of the suspension of the computation of asset value, the said 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 Fund
recorded on the books of the Fund for that day.
b. The foregoing fee shall be paid on a monthly basis in cash by IDS Life
to AEFC within five (5) business days after the last day of each month.
7. Miscellaneous.
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a. IDS Life recognizes that AEFC now renders and may continue to render
investment advice and other services to other persons which may or may
not have investment policies and investments similar to those of the
Funds included herein, and that AEFC manages its own investments and
those of certain subsidiaries. AEFC shall be free to render such
investment advice and other services, and IDS Life hereby consents
thereto. This agreement is separate from any agreement IDS Life and
AEFC may have concerning investment advice in respect of certain
separate accounts of IDS Life.
b. It is understood and agreed that in furnishing the investment advice
and other services as herein provided neither AEFC, nor any officer,
director, employee, or agent thereof shall be held liable to IDS Life
or Funds included herein or creditors 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 AEFC may rely upon information furnished to it
reasonably believed to be accurate and reliable and that, except as
hereinabove provided, AEFC shall not be accountable for any loss
suffered by IDS Life or Funds included herein by the reason of the
latter's action or nonaction on the basis of any advice or
recommendation of AEFC, its officers, directors or agents.
8. Renewal and Termination.
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a. As to any Fund which (1) is a registered investment company under the
Investment Company Act of 1940, and (2) this agreement has become
applicable as provided in Section 1 above, this agreement, unless
terminated pursuant to paragraph b, c, or d below, shall continue in
effect from year to year, provided its continued applicability is
specifically approved at least annually (i) by the Board of Directors
of said Fund or by a vote of the holders of a majority of the
outstanding votes of the Fund and (ii) by 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.
b. The applicability of this agreement to any Fund which is a registered
investment company within the meaning of the Investment Company Act of
1940 may be terminated by sixty days written notice to either AEFC or
IDS Life.
c. AEFC or IDS Life may terminate this agreement or the applicability of
this agreement to any Fund by giving sixty days written notice to the
other party.
d. This agreement shall terminate, as to any Fund which is a registered
investment company under the Investment Company Act of 1940, in the
event of its assignment, the term "assignment" for this purpose having
the same meaning set forth in the Investment Company Act of 1940, as
amended.
IN WITNESS WHEREOF, the parties hereto have executed the foregoing agreement on
the day and year first above written.
IDS LIFE INSURANCE COMPANY ATTEST:
By: By:
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name:
Director and Executive Vice President - Annuities -------------------
Title:
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AMERICAN EXPRESS FINANCIAL
CORPORATION ATTEST:
By: By:
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Name:
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Title: Vice President Title:
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SCHEDULE A
FUND PERCENTAGE OF
NET ASSETS
AXP Variable Portfolio - Partners Series, Inc.
o AXP Variable Portfolio - Partners Small Cap Value Fund .25%