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 aECertificate, 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.
/s/Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
Print Title: Vice President - Assured Assets
/s/Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
Print Title: Assistant Secretary
SECURITIES AMERICA INC.
/s/Xxxxxx X. XxXxxxxxx
Xxxxxx X. XxXxxxxxx
Print title: Sr. Vice President
/s/Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Print title: Secretary
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.
