SELLING AGENT AGREEMENT
This Agreement is made as of March 10, 1999, by and between American Express
Financial Advisors Inc., a Delaware corporation (the "Company"), distributor for
certain registered face-amount certificates offered by IDS Certificate Company
(the "Issuer"), and Securities America Inc., a Delaware corporation (the
"Agent").
I. ACTIVITIES
(1) During the term of this Agreement, the Agent and persons
designated by it shall have the non-exclusive right to
solicit applications for and to distribute those face-amount
certificates issued by the Issuer that the Company may from
time to time agree to permit the Agent to offer to the
AgentOs clients ("Certificates"). The Agent and the Company
agree to be bound by the terms of this Agreement in
connection with any such offers of Certificates. Each
Certificate that the Company may permit the Agent to offer
shall be described in Schedules attached hereto, which
Schedules may be amended or supplemented by the Company from
time to time by mailing a revised Schedule to the Agent.
(2) It is the Agent's responsibility to insure that any
investments in Certificates by its clients are suitable for
those clients. Therefore, the Agent shall cause applications
for Certificates to be made available to its clients if the
Agent, in its sole discretion, determines that such products
are appropriate or suitable for its clients. The Company and
the Issuer shall each have the right, in its sole
discretion, to the extent not inconsistent with the
Certificates, to decline to accept investments by clients of
the Agent in Certificates.
(3) The Agent agrees that all applications for Certificates
shall be made in writing on forms acceptable to the Company
and the Issuer; provided however, that the Agent may accept
telex or telephone purchase instructions from its clients in
accordance with Section V(3) hereof. Every application shall
be subject to acceptance or rejection by the Issuer
according to the terms thereof. The Agent shall handle
applications in accordance with instructions forwarded by
the Company to the Agent from time to time and shall obtain,
keep on file and provide copies to the Company and the
Issuer of any and all tax related documentation as required
by law or requested by the Company or the Issuer from time
to time. The Agent shall promptly remit to the Issuer the
payment tendered with each application, such payment to be
in conformity with the provisions of the Certificate for
which such application is made. Prior to the
acceptance by the Company or the Issuer of instructions from the Agent with
regard to a Certificate or prospective investment in a Certificate, the
Agent shall provide the Company and the Issuer with written authorization
from the owner of or prospective investor in the Certificate, as the case
may be, that the Company and the Issuer may accept such instructions from
the Agent in the form in which the Agent provides them.
(4) Company reserves the right in its discretion to suspend
sales or withdraw the offering of any Certificate in whole
or in part, without notice. Upon notice to the Agent that
the Company has so suspended sales or withdrawn an offering,
or of the suspension of the effectiveness of a registration
statement or amendment or that a prospectus is not on file
as described below in this Section I(4), Certificates shall
not be offered by the Agent under any of the provisions of
this Agreement and no application for the purchase or sale
of Certificates hereunder shall be accepted if and so long
as the effectiveness of the current registration statement
or any necessary amendments thereto shall be suspended under
any of the provisions of the Securities Act of 1933 (the
"1933 Act") or any applicable state securities laws or if
and so long as a current prospectus as required by Section
5(b)(2) of the 1933 Act or any applicable state securities
laws is not on file with the Securities and Exchange
Commission (the "SEC") or any applicable state securities
regulator, as the case may be.
(5) The Agent and its personnel shall not make any
representations concerning a Certificate except those
contained in the prospectus therefor or any applicable
written sales literature approved by Company in accordance
with Section IV(4).
(6) The Agent and its personnel shall be responsible for
determining the suitability of each sale, and of any other
transaction recommended by the Agent to one or more of its
clients, and for servicing its client accounts.
Servicing client accounts shall include the following:
i) serving as the primary contact for the Agent's clients
and prospects regarding Certificates;
ii)receiving from clients and prospects and timely
transmitting to Company instructions as to sales,
surrenders, ownership changes, term changes and
other actions sought with respect to Certificates;
iii)answering client questions and inquiries regarding
Certificates;
iv) determining whether the actions sought by clients
concerning Certificate ownership, transfer,
surrender and the like are legally permissible or
advisable in all applicable jurisdictions;
v) delivering to clients in a timely fashion all of
the documentation described in Section I(7) hereof;
provided, however, that the Agent has received such
documentation in a timely fashion; and, if the
Agent has not received such documentation in a
timely fashion, delivering such documentation to
clients promptly after the Agent receives it;
vi) keeping and maintaining such records as
required pursuant to this agreement or by law; and
vii) carrying out such other activities and
responsibilities as are described in this Agreement
and/or may be agreed to between the Agent and
Company from time to time.
II. COMPANY'S RESPONSIBILITY
The Company shall promptly provide the Agent with current
prospectuses, sales materials and other literature and information
legally required or reasonably requested by the Agent; provided,
however, that the Company and the Issuer shall not be obligated to
disclose proprietary information, trade secrets or other confidential
information. The Company shall arrange with the Issuer for
confirmations and quarterly statements of account that identify the
Agent to be sent to Certificate owners with regard to whom the Agent
is entitled to compensation under Exhibit A.
III. COMPENSATION
The Company shall pay the Agent and the Agent accepts in full payment
for its activities hereunder, compensation with respect to each
Certificate as described in the Schedule(s) attached hereto. Such
Schedule(s) may be amended or supplemented by the Company from time
to time by mailing a revised Schedule to the Agent.
IV. FURTHER LEGAL COMPLIANCE
(1) This Agreement and any transaction through, or payment to,
the Agent pursuant to the terms of this Agreement is
conditioned on the Agent's representation to the Company and
the Issuer that, as of the date of this Agreement, the Agent
is, and at all times during its effectiveness the Agent will
be, a registered broker-dealer under the Securities Exchange
Act of 1934 and qualified under applicable state securities
laws in each jurisdiction in which the Agent is required to
be qualified to act as a broker-dealer in securities, and a
member in good standing of the National Association of
Securities Dealers, Inc. (the "NASD"). The Agent agrees to
immediately notify the Company and the Issuer promptly in
writing and immediately suspend sales of Certificates if this
representation ceases to be true. The Agent agrees that it
will comply with the rules of the NASD.
(2) The Company and the Issuer shall have no obligation or
responsibility with respect to the Agent's right to sell
Certificates in any state or jurisdiction. From time to time
the Company may furnish the Agent with information
identifying the states and jurisdictions under the securities
laws of which it is believed Certificates may be sold. The
Agent shall not transact applications for Certificates in
states or jurisdictions in which the Company or the Issuer
indicates Certificates may not be sold.
(3) The Agent represents and warrants that it will observe and
comply with all applicable laws, rules and regulations
("Laws") with respect to the distribution, sale and
servicing of the Certificates and the conduct of its
business in relation thereto, including but not limited to
Laws relating to currency transactions, transporting funds
or monetary instruments in or out of the United States, wire
transfers and other financial transactions.
(4) The Company or the Issuer will furnish the Agent with copies
of the prospectus and sales literature for each Certificate
identified in a Schedule hereto, in reasonable quantities
upon the Agent's request. The Agent agrees to deliver a copy
of the current prospectus in accordance with the provisions
of the 1933 Act to each purchaser of such a Certificate for
whom the Agent acts as broker. The Company shall file sales
literature and promotional material for such Certificates
with the NASD and the SEC as required. The Agent may not
publish or use any sales literature or promotional materials
with respect to Certificates without the Company's prior
review and written approval.
(5) The Agent shall provide the Company and the Issuer with true,
accurate and complete information about the Agent for
inclusion in the prospectuses and periodic reports, including
reports on Forms 10-K and 10-Q, of the Issuer.
V. MISCELLANEOUS
(1) The Agent for all purposes herein 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, represent or bind the Company, the Issuer or its
transfer agent.
(2) 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 the same, (a) if to the
Company, at American Express Financial Advisors Inc., IDS
Tower 10, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attn: Vice
President-Assured Assets, and (b) if to the Agent, at
Securities America Inc., 0000 Xxxx Xxxxxx Xxxx, Xxxxx 000,
Xxxxx, Xxxxxxxx 00000, Attn: Legal Department, or to such
other address as either party may designate by such written
notice to the other.
(3) The Agent may at its own risk accept telex or telephone
purchase, withdrawal or transfer instructions from its
clients in accordance with the Agent's internal procedures.
All such instructions shall nevertheless be communicated in
written form to the Company and shall be subject to
acceptance or rejection by the Issuer.
(4) This Agreement may be amended only by written instrument
executed by both parties hereto.
(5) This Agreement may be executed in any number of
counterparts, each executed counterpart constituting an
original but all together only one Agreement.
(6) All references in this Agreement to the prospectus refer to
the then current version of the relevant prospectus and
include any stickers or supplements thereto.
VI. TERMINATION
(1) This Agreement shall continue in effect until December, 1999
and shall continue from year to year thereafter unless and
until terminated by either party as hereinafter provided.
(2) This Agreement may be terminated without penalty by either
the Company or the Agent at any time whether prior to, at or
after the date hereof by giving the other party at least
sixty (60) days' prior written notice of such intention to
terminate.
(3) This Agreement will terminate automatically in the event of
its assignment (as defined in the Investment Company Act of
1940.)
VII. INDEMNIFICATION
In the event the Agent breaches any of the terms and conditions of
this Agreement, the Agent shall indemnify the Company, the Issuer and
their affiliates for any damages, losses, costs and expenses
(including reasonable attorneys' fees) arising out of or relating to
such breach. The Company and the Issuer may offset any such damages,
losses, costs and expenses against any amounts due to the Agent
hereunder.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
AMERICAN EXPRESS FINANCIAL
ADVISORS INC.
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Print name:
Title: Vice President
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Print name:
Title: Secretary
SECURITIES AMERICA INC.
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Print title:
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Print name:
Print title:
Schedule A
Effective as of March 10, 1999
1. Pursuant to Section I(1) of the Selling Agent Agreement, dated as of
March 10, 1999, the Agent may offer the American Express Stock Market
Certificate ("Market Certificate"), which Market Certificate bears
interest that may be tied in whole or in part to any upward movement in
a stock market index.
2. The Agent shall be compensated as follows on the basis of the principal
amount of the Market Certificates, if the client has purchased a Market
Certificate through the Agent and has not designated another selling
agent, distributor or servicing agent for the account, or if the client
has designated the Agent as selling agent or servicing agent for the
account, or if the Company, the Issuer and the Agent agree in writing
that the Agent should be compensated with regard to the client's Market
Certificate account.
The Agent shall receive a sales commission equal to 0.80% per term of
the principal amount of each such Market Certificate and shall receive
marketing support fees and other compensation equal to 0.10% of the
principal amount of each such Market Certificate. For the purposes of
this Schedule A, "principal amount" shall be equal to the amount
invested, plus additional investments and interest when credited to the
account but less withdrawals and penalties.
Provided, however, that no payment shall be made to the Agent, or to
any other selling agent or distributor (except the Company) with whom
the Company or the Issuer has a selling agent or distribution
agreement, of compensation as to which the Company or the Issuer has
actually received at its principal office written notice of a competing
claim to such compensation from the Agent or such a selling agent or
distributor, until the parties disputing the payment resolve their
dispute or such payment is ordered by a court, panel of arbitrators, or
similar authority with jurisdiction over the matter.
The Agent shall be paid quarterly in arrears, so that the Agent shall
be paid after the end of each of the first three quarterly
anniversaries of the beginning of each one-year term and then after the
end of each such term. Compensation shall be calculated on a 90 day per
term quarter basis; provided, however, that compensation shall not be
earned during any period in which the Market Certificate is earning
only interim interest. Notwithstanding the foregoing, during any term
in which a client is receiving fixed interest, if she/he elects to
again participate in the market, the fee shall be prorated for such
partial quarter and paid after the client's new term begins.
3. The compensation payable to the Agent for term quarters, or prorated
quarters, as the case may be, ending during any given calendar month
shall be aggregated and paid to the Agent in a lump sum within 15 days
after each calendar month end.
