SELLING DEALER AGREEMENT
This Agreement is made as of _______________ ("Effective Date"), by and between
American Express Financial Advisors Inc., a Delaware corporation (the
"Distributor"), distributor for certain registered face-amount certificates
offered by American Express Certificate Company (the "Issuer"), and
___________________________, a ______________ corporation (the "Dealer").
I. ACTIVITIES
(1) During the term of this Agreement, the Dealer and persons designated by it
shall have the non-exclusive right to solicit orders for and to distribute
those face-amount certificates issued by the Issuer that the Distributor
may from time to time agree to permit the Dealer to offer to the Dealer's
clients ("Certificates"). The Dealer and the Distributor agree to be bound
by the terms of this Agreement in connection with any such offers of
Certificates. Each Certificate that the Distributor may permit the Dealer
to offer shall be described in a Product Exhibit attached hereto, which
Product Exhibits may be amended or supplemented by the Distributor from
time to time by mailing a revised Product Exhibit to the Dealer.
(2) It is the Dealer's responsibility to insure that any investments in
Certificates by its clients are suitable for those clients pursuant to the
applicable suitability requirements of the National Association of
Securities Dealers, Inc. ("NASD") and any state or federal law, as amended
from time to time.
(3) The Dealer agrees that all orders and instructions for Certificates shall
be made by the facilities of the Depository Trust Company ("DTC") or if
those facilities are not available for the Certificates being sold, then in
writing on forms acceptable to the Distributor and the Issuer sent by
facsimile, or as the Distributor and the Dealer otherwise agree; provided
however, that the Dealer may accept telex or telephone purchase
instructions from Dealer's clients in accordance with Section VI (3)
hereof. Every order by the Dealer shall be subject to acceptance or
rejection by the Distributor or Issuer in the sole discretion of either.
The Dealer shall handle orders in accordance with instructions forwarded by
the Distributor to the Dealer from time to time. All such orders and
instructions shall comply with time frames and other requirements of DTC to
the extent applicable.
(4) Payment for Certificates ordered by Dealer shall be made in federal funds
or by check or bank wire in U.S. dollars, through DTC if applicable, and
must be received by Distributor by or before the settlement date of such
Certificates or such other settlement period as then may be required by
Rule 15c6-1 under the Securities Exchange Act of 0000 (xxx "Xxxxxxxx Xxx").
If, for any reason, payment is not received by Distributor after the
execution of any order by or through Dealer, Distributor reserves the
right, without any notice, to cancel the sale and to hold Dealer
responsible for any loss, including loss of profits, suffered by
Distributor or Issuer resulting from such failure.
(5) Distributor reserves the right in its discretion to suspend sales or
withdraw the offering of any Certificate in whole or in part, without
notice and without incurring any liability or obligation to Dealer.
(6) Upon notice to the Dealer that the Distributor 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 (6), Certificates shall not be offered by
the Dealer under any of the provisions of this Agreement and no order 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 "Securities 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 Securities 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.
(7) The Dealer and its personnel shall not make any representations concerning
a Certificate except those contained in the prospectus therefor, or the
registration statement of the Issuer on Form S-1 relating to the sale of
the Certificates, including all exhibits, as of the effective date of the
registration statement or the most recent post effective amendment thereto
(the "Registration Statement").
(8) The Dealer and its personnel shall be responsible for determining the
suitability of each sale, and of any other transaction recommended by the
Dealer 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 Dealer's clients and prospects
regarding Certificates;
ii) receiving from clients and prospects and timely transmitting to
Distributor instructions as to sales, surrenders or withdrawals,
ownership changes (if applicable), term changes (if applicable) 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 or withdrawal, and the like
are legally permissible or advisable in all applicable jurisdictions;
v) keeping and maintaining such records as required pursuant to this
agreement or by law;
vi) promptly forwarding to the Dealer's clients who own Certificates all
notices from the Issuer or the Distributor to such owners, including
without limitation notices about upcoming renewal dates;
vii) sending to the client confirmations of Certificate transactions as
required by law or by the terms of the Certificate, as described in
the applicable prospectus or otherwise;
viii) sending a current applicable prospectus for a Certificate, and,
if applicable, a flyer containing current rates for the Certificate
("Rate Flyer") and any other required supplemental material to a
client prior to or at the same time as the confirmation of a
purchase of a Certificate; and
ix) carrying out such other activities and responsibilities
as are described in this Agreement and/or may be agreed to between
the Dealer and Distributor from time to time;
(9) Dealer shall provide to the Distributor or the Issuer a certified copy of a
death certificate of a registered or beneficial owner of a Certificate, and
such other evidence of such death as is reasonably requested by the
Distributor or the Issuer, as a condition precedent to any obligation of
the Distributor or the Issuer to take any action contingent on the death of
such registered or beneficial owner.
II. DISTRIBUTOR'S RESPONSIBILITY
The Distributor shall promptly provide the Dealer with current
prospectuses and other information legally required or reasonably
requested by the Dealer; provided, however, that the Distributor and
the Issuer shall not be obligated to disclose proprietary
information, trade secrets or other confidential information.
III. COMPENSATION
The Distributor shall pay the Dealer and the Dealer accepts in full
payment for its activities hereunder, compensation with respect to
each Certificate as described in the Product Exhibit(s) attached
hereto. Such Product Exhibit(s) may be amended or supplemented by the
Distributor from time to time by mailing a revised Product Exhibit to
the Dealer. The Dealer's placement of an order for Certificates after
the date of mailing of the revised Product Exhibit shall conclusively
evidence Dealer's agreement to the terms of the revised Product
Exhibit. If the Issuer, Distributor or a court or other legal
authority cancels or revokes a sale of a Certificate, Dealer shall
repay its compensation to the Distributor.
IV. FURTHER LEGAL COMPLIANCE
(1) This Agreement and any transaction through, or payment to, the Dealer
pursuant to the terms of this Agreement is conditioned on the Dealer's
representation to the Distributor and the Issuer that, as of the date of
this Agreement, the Dealer is, and at all times during its effectiveness
the Dealer will be, a registered broker-dealer under the Exchange Act and
qualified under applicable state securities laws in each jurisdiction in
which the Dealer is required to be qualified to act as a broker-dealer in
securities, and a member in good standing of the NASD. The Dealer agrees to
immediately notify the Distributor and the Issuer promptly in writing and
immediately suspend sales of Certificates if this representation ceases to
be true. The Dealer agrees that it will comply with the rules of the NASD
and applicable laws.
(2) Upon application by Dealer, the Distributor may furnish the Dealer
information as to any advice received from Distributor's blue sky agent
(currently Clear Sky Corporation) concerning the jurisdictions in which the
Certificates have been qualified for offer or sale or are exempt under the
securities or Blue Sky laws of such jurisdictions. The Distributor and the
Issuer shall have no obligation or responsibility with respect to the
Dealer's right to sell Certificates in any state or jurisdiction. The
Dealer shall not transact orders for Certificates in states or
jurisdictions in which the Distributor or the Issuer indicates Certificates
may not be sold.
(3) Each order that Dealer submits, directly or indirectly, to Distributor for
the purchase of a Certificate shall identify the state or states of offer
and sale of such Certificate and the amount purchased by customers in each
such state who will be the beneficial owners of such Certificate. If the
sale of Certificates to customers in a particular state would cause the
total amount of Certificates sold in such state to exceed the amount of
such Certificates that had been registered in such state, Distributor will
have no obligation to sell such Certificates to Dealer or its customer.
Dealer will indemnify and hold Distributor harmless against any liabilities
(including costs of investigation and defense) to which Distributor may
become subject as a result of any misrepresentation as to the state of
offer and sale to customers for whom Dealer purchases Certificates.
(4) The Distributor or the Issuer will furnish the Dealer with copies of the
prospectus for each Certificate identified in a Product Exhibit hereto in
reasonable quantities upon the Dealer's request. If a Rate Flyer or other
supplemental materials are required, then upon the Dealer's request, the
Distributor or the Issuer will furnish the Dealer, at the Distributor or
Issuer's option, with either a copy (which may be an electronic copy) from
which the Dealer may make copies, or with reasonable quantities, of the
Rate Flyer. The Dealer agrees to deliver a copy of the current prospectus
and, if a Rate Flyer is applicable, a copy of the Rate Flyer, in accordance
with the provisions of the Securities Act applicable to prospectus
delivery, to each purchaser of such a Certificate for whom the Dealer acts
as broker or dealer. The Dealer shall file sales literature and promotional
material for such Certificates with the NASD and the SEC as required;
provided, however, that Dealer may not publish or use any sales literature
or promotional materials with respect to Certificates without the
Distributor's prior written consent (but, notwithstanding such consent,
Dealer shall remain solely responsible for any advertising or sales
material it prepared). Dealer agrees to indemnify and hold Distributor
harmless against any liabilities (including costs of investigation and
defense) to which Distributor may be subject in respect of any such
information, advertising or sales material that is furnished to any person,
published or used with or without prior written consent of Distributor.
V. REPRESENTATIONS AND WARRANTIES
(1) Dealer represents and warrants to Distributor that:
(a) Dealer is a corporation, partnership or other entity duly
organized and validly existing in good standing under the laws
of the jurisdiction in which it is organized, and is qualified
to act as a broker-dealer in the states or other jurisdictions
in which it transacts business.
(b) The execution and delivery of this Agreement and the
performance of the transactions contemplated hereby have been
duly authorized by all necessary action and all other
authorizations and approvals (if any) required for Dealer's
lawful execution and delivery of this Agreement and Dealer's
performance hereunder have been obtained.
(c) Upon execution and delivery by it, and assuming due and valid
execution by Distributor, this Agreement will constitute a
valid and binding agreement, enforceable against Dealer in
accordance with its terms.
(d) Dealer is familiar with Rule 15c2-8 under the Exchange Act,
Section 4(3) of the Securities Act and Section 24(d) of the
Investment Company Act of 1940 (the "Investment Company
Act") relating to the distribution and delivery of
preliminary and final prospectuses and agrees that it will
comply therewith and that it will deliver a prospectus (and,
if applicable, a Rate Flyer and any other required
supplemental materials) to all customers for whom it accepts
an order for purchase of Certificates. Additional copies of
the Prospectuses will be supplied to it as it may reasonably
request. Upon Dealer's receipt from a customer of an order
for the purchase of Certificates, Dealer shall send to the
customer a written confirmation of the transaction that
satisfies the requirements of Rule 10b-10 of the Exchange
Act. In addition, upon receipt of payment for Certificates
ordered from Distributor through or by Dealer or upon the
renewal of Certificates pursuant to the terms of the
prospectus, Distributor shall send to the customer a written
confirmation of such transaction; provided, however, that
Distributor shall not send such confirmation to the customer
in such cases where Dealer, DTC, or another intermediary is
the record owner of such Certificates or where the parties
have agreed that Dealer shall send such confirmation to the
customer.
(e) Dealer will obtain from each customer to whom it sells
Certificates any taxpayer identification number or other
certification required under Section 1441 or 3406 of the
Internal Revenue Code of 1954, as amended (the "Code"), and
the regulations promulgated thereunder, and comply with
applicable tax reporting requirements.
(f) Dealer is a member in good standing of the NASD or, if it is
not such a member, it is a foreign bank or a dealer or
institution not eligible for membership in the NASD which
agrees to make no sales within the United States, including
territories or possessions of the United States, or to
persons who are citizens thereof or residents therein, and
in making other sales to comply, as though it were a member
of NASD, with the provisions of Sections 2730, IM-2730,
2740, IM-2740, 2750 and IM-2750 of the Conduct Rules of the
NASD and with Section 2420 thereof as that Section applies
to a non-NASD member broker or dealer in a foreign country.
(g) Dealer will undertake to comply with respect to the offering
of Certificates to the public pursuant to this Agreement
with all applicable provisions of the Securities Act, the
Exchange Act and the Investment Company Act and the rules
and regulations thereunder and with the applicable rules of
the NASD and the conduct of Dealer's business in relation
thereto and all other applicable laws, including but not
limited to laws, rules and regulations relating to currency
transactions, transporting funds or monetary instruments in
or out of the United States, wire transfers and financial
transactions, and Dealer will indemnify and hold Distributor
harmless against any liabilities (including costs of
investigation and defense) to which Distributor may become
subject in respect of Dealer's breach of this Section V(g).
(h) Certificates will only be offered by Dealer's agents who are
appropriately registered with the NASD and under state
securities laws, as amended from time to time.
(i) If the Certificates sold by Dealer are indexed Certificates,
Dealer agrees that its confirmations and statements to owners
of such certificates will state, if applicable:
i) the maximum return for the term of the Certificate,
ii) the percentage participation in the index for the
term of the Certificate, and
iii) the minimum interest for the term of the Certificate.
Dealer further agrees that its confirmations, statements and
other communications to such owners will not include an
indexed value for the Certificate before the end of the term
of the Certificate if the indexed value depends on the value
of the index on the last day of such term.
VI. MISCELLANEOUS
(1) The Dealer 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 Distributor, the Issuer or its
transfer agent.
(2) Any notice to a party 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:
If to the Distributor:
American Express Financial Advisors Inc.
1818 AXP Financial Center
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Compliance Officer
If to the Dealer:
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or to such other address as either party may designate by
such written notice to the other.
(3) The Dealer may at its own risk accept telex or telephone
purchase, withdrawal or transfer instructions from its
clients in accordance with the Dealer's internal procedures.
All such instructions shall nevertheless be communicated in
written form to the Distributor and shall be subject to
acceptance or rejection by the Distributor or the Issuer. In
the event that the facilities of DTC are not available, all
communication with the Distributor shall be in writing sent
by US Mail, courier, or facsimile.
(4) Distributor may modify this Agreement at any time by written
notice to you. The first order placed by Dealer subsequent to
the giving of such notice shall be deemed acceptance by
Dealer of the modification described in such notice.
(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.
(7) Each party acknowledges that the names, addresses and other
information concerning their respective customers are and
shall remain the sole property of such party, and neither
party or any affiliate shall use such names, addresses or
other information concerning the other party's customers for
any purpose except in connection with the performance of its
respective duties and responsibilities hereunder and except
for servicing and informational mailings relating to the
Certificates. Notwithstanding the foregoing, this paragraph
VI (7) shall not prohibit either party or its affiliates
from utilizing for any purpose the names, addresses or other
information concerning any of the other party's customer
names, addresses or other information if such information is
obtained in any manner other than from each other pursuant
to this Agreement. The provisions of this paragraph (7)
shall survive the termination of this Agreement.
VII. INDEMNIFICATION
(1) The Dealer shall reimburse or indemnify, defend and hold
harmless the Distributor, the Issuer and their affiliates from
and against any and all claims, demands, actions, losses,
damages, costs and expenses (including reasonable attorneys'
fees) arising out of or relating to (1) any breach by Dealer
or Issuer of any term, condition, representation or warranty,
covenant or provision contained in this Agreement; (2) any
violation of any law, rule or regulation by Dealer; and (3)
Dealer's negligence or willful misconduct. The Distributor and
the Issuer may offset any such claims, demands, actions,
losses, damages, costs and expenses against any amounts due to
the Dealer hereunder.
(2) The Distributor shall reimburse or indemnify, defend and hold
harmless Dealer from and against any and all claims, demands,
actions, losses, damages, costs and expenses (including
reasonable attorney's fees) arising out of or relating to (1)
any inaccuracy or omission in any prospectus for any
Certificate or the registration statement of the Issuer
relating to the sale of the Certificates, including all
exhibits, as of the effective date of the registration
statement or the most recent post-effective amendment thereto,
or any annual report or proxy statement of the Issuer for any
Certificate or any advertising or promotional material for the
Certificate prepared by Distributor or Issuer or its
affiliates or agents; (2) any breach by Distributor or Issuer
of any term, condition, representation, warranty, covenant or
provision contained in this Agreement; (3) any violation of
any law, rule or regulation by Distributor or Issuer; and (4)
Distributor or Issuer's negligence or willful misconduct.
(3) Neither party shall have any obligation of indemnity to the
extent said claim, demand, action, loss, damage, cost or
expense is caused by an act or omission of the other party.
Each party shall use its best efforts to mitigate all costs
and expenses. Additionally, each party acknowledges and agrees
that the other party's obligation of indemnity or
reimbursement, if any, shall be limited to actual damages. In
no event shall either party be liable, in any manner
whatsoever, for consequential, incidental, special or punitive
damages.
VIII. TERMINATION
(1) This Agreement shall remain in effect beginning upon the
Effective Date, until such time it is terminated in
accordance with this Section.
(2) This Agreement may be terminated without penalty by either
the Distributor or the Dealer 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).
IX. REPRESENTATIONS TO SURVIVE
The provisions of Sections IV (2), IV (3), V and VII of this
Agreement shall survive the offer and sale of the Certificates, to
the extent permitted by law, and the termination and cancellation of
this agreement.
X. APPLICABLE LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of Minnesota, without giving effect to principles
of conflicts of laws.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
AMERICAN EXPRESS FINANCIAL ADVISORS INC. [Dealer Name]
Distributor
By: __________________________ By: ________________________
Title: _______________________ Title: _____________________
Date: ________________________ Date: ______________________
Product Exhibit
American Express Equity Indexed Savings Certificate
Effective as of _____________
1. Pursuant to Section I (1) of the Selling Dealer Agreement, dated as of
______________, the Dealer may offer American Express Equity Indexed
Savings Certificates ("Indexed Certificates"), which Indexed
Certificates bear interest that may be tied in whole or in part to any
upward movement in a stock market index.
2. The Dealer shall be compensated as follows on the basis of the
principal amount of the Indexed Certificates, if the client has
purchased an Indexed Certificate through the Dealer and has not
designated another selling dealer, distributor or servicing agent for
the account, or if the client has designated the Dealer as selling
dealer or servicing dealer for the account, or if the Distributor, the
Issuer and the Agent agree in writing that the Agent should be
compensated with regard to the client's Indexed Certificate account.
The Dealer shall receive a sales commission equal to __% per term of
the principal amount of each such Indexed Certificate. Dealer shall
receive additional compensation equal to __% per term of the principal
amount of each such Indexed Certificate. Such additional compensation
shall be for payment or reimbursement of ticket charges or other fees
charged by transfer agents or others to the Dealer, and for selling,
promotional and client servicing activities. For the purposes of this
Product Exhibit, "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 Dealer, or to
any other selling dealer or distributor (except the Distributor) with
whom the Distributor or the Issuer has a selling dealer or distribution
agreement, of compensation as to which the Distributor or the Issuer
has actually received at its principal office written notice of a
competing claim to such compensation from the Dealer or such a selling
dealer 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 Dealer shall be paid upon commencement of a term of the Indexed
Certificates as described in the applicable prospectus.
3. The compensation payable to the Dealer for terms other than an initial
term of an Indexed Certificate beginning during any given calendar
month shall be aggregated and paid to the Dealer in a lump sum within
15 days after each calendar month end. The Dealer may withhold the
compensation from the amount transmitted to the Distributor upon the
sale of an Indexed Certificates.
