Exhibit (9)(c)
SALES AGREEMENT
THIS AGREEMENT is made by and between The Galaxy VIP Fund ("TRUST"), a
Massachusetts business trust, and American Skandia Life Assurance Corporation
("SKANDIA"), a life insurance company organized under the laws of the State of
Connecticut.
WHEREAS, TRUST is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940 ("'40 Act") as an open-end
diversified management investment company, and its shares are registered under
the Securities Act of 1933 ("'33 Act"); and
WHEREAS, TRUST is organized as a series fund, currently with four
portfolios (individually, a "Portfolio" and collectively, the "Portfolios"); and
WHEREAS, TRUST was organized primarily as a funding vehicle for
variable contracts offered by life insurance companies through separate accounts
of such life insurance companies; and
WHEREAS, SKANDIA has established separate accounts registered as unit
investment trusts under the '40 Act to offer variable contracts and may
establish others, and is desirous of having TRUST serve as one of the funding
vehicles for at least one such variable contract, and possibly others in the
future.
NOW, THEREFORE, and in consideration of the mutual covenants herein
contained, it is hereby agreed by and between TRUST and SKANDIA as follows:
1. TRUST will make available to the designated separate accounts of
SKANDIA shares of TRUST Portfolios for investment of purchase payments and, as
applicable, cash values, account values or other contract values, as per the
terms of the applicable contracts, of variable contracts allocated to the
designated separate accounts. TRUST will diversify the assets in each Portfolio
in the manner required for the variable contracts to be treated as such under
Section 817(h) of the Internal Revenue Code of 1986, as amended, and the rules
and regulations thereunder.
2. TRUST will make the shares available indefinitely to such
separate accounts for purchase at the applicable net asset value per share on
those days on which TRUST calculates its net asset value pursuant to the rules
of the Securities and Exchange Commission. Notwithstanding the foregoing, the
Board of Trustees of TRUST may refuse to sell shares of any Portfolio to any
person, or suspend or terminate the offering of shares of any
Portfolio if such action is required by law or by regulatory authorities having
jurisdiction or is, in the sole discretion of the Board of Trustees of TRUST
acting in good faith and in light of their fiduciary duties under federal and
any applicable state laws, necessary in the best interest of the shareholders of
such Portfolio.
3. Purchase and redemption orders shall be placed for such shares
pursuant to TRUST procedures which are then in effect and which may be modified
from time to time. TRUST will provide SKANDIA with documentation of all
procedures now in effect and will undertake to inform SKANDIA of any
modifications to such procedures.
4. TRUST will provide SKANDIA camera ready copy of the current TRUST
prospectus and any supplements thereto for printing by SKANDIA. TRUST will
provide SKANDIA a copy of the statement of additional information for
duplication. TRUST will provide SKANDIA copies of its proxy material suitable
for printing. TRUST will provide SKANDIA annual and semi-annual reports and any
supplements thereto, in camera-ready form. SKANDIA will print or duplicate such
documents for prospective investors at its own expense.
5. (a) SKANDIA shall not give any information or make any
representations or statements on behalf of TRUST or concerning TRUST in
connection with the sale of the variable contracts other than the information or
representations contained in the registration statement or prospectus for TRUST
shares, as such registration statement and prospectus may be amended or
supplemented from time to time, or in reports or proxy statements for TRUST, or
in sales literature or other promotional material approved by TRUST.
(b) SKANDIA will make available to TRUST at least one complete
copy of all registration statements, prospectuses, statements of additional
information, reports, solicitations for voting instructions, sales literature
and other promotional materials, applications for exemptions, requests for no
action letters, and all amendments to any of the above, that relate to the
variable contracts or the separate accounts, contemporaneously with the filing
of such documents with the Securities and Exchange Commission.
6. (a) SKANDIA shall be solely responsible for its actions in
connection with its use of TRUST and its shares and shall indemnify and hold
harmless TRUST, its officers and trustees from any liability for SKANDIA's
negligent or wrongful acts or failures to act with respect to SKANDIA's use of
TRUST or its shares.
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(b) TRUST shall be solely responsible for its actions in
connection with its operations and shall indemnify and hold harmless SKANDIA,
its officers and directors from any liability for TRUST's negligent or wrongful
acts or failures to act with respect thereto.
7. SKANDIA agrees to inform the Board of Trustees of TRUST of the
existence of or any potential for any material irreconcilable conflict of
interest between the interests of owners of contracts using the separate
accounts of SKANDIA which invest in the TRUST and/or the interests of owners of
contracts using any other separate account of any other insurance company which
invests in the TRUST.
A majority of the Board of Trustees of the TRUST ("Board") shall be
composed of persons who are not "interested persons" of TRUST as defined by the
'40 Act. The Board shall monitor TRUST for the existence of any material
irreconcilable conflicts between the interests of the contract owners of all
separate accounts investing in the TRUST.
Any material irreconcilable conflict may arise for a variety of
reasons, including:
(a) an action by any state insurance regulatory authority;
(b) a change in applicable federal or state insurance, tax, or
securities laws or regulations, or a public ruling, private letter ruling,
or any similar action by insurance, tax, or securities regulatory
authorities;.
(c) an administrative or judicial decision in any relevant
proceeding;
(d) the manner in which the investments of any Portfolio are
being managed;
(e) a difference in voting instructions given by variable
annuity contract owners and variable life insurance contract owners or by
contract owners of different life insurance companies utilizing TRUST; or
(f) a decision by SKANDIA to disregard the voting instructions
of contract owners.
SKANDIA will be responsible for assisting the Board in carrying out
its responsibilities by providing the Board with all information reasonably
necessary for the Board to consider any issue raised including information as to
a decision by SKANDIA to disregard voting instructions of contract owners.
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It is agreed that if it is determined by a majority of the members of
the Board or a majority of its disinterested Trustees that a material
irreconcilable conflict exists affecting SKANDIA, SKANDIA shall, at its own
expense, take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, which steps may include, but are not limited
to:
(i) withdrawing the assets allocable to some or all of the
separate accounts of SKANDIA from TRUST or any Portfolio and
reinvesting such assets in a different investment medium, including
another Portfolio of the TRUST, if any, or submitting to a vote of all
affected contract owners the question of whether segregation of assets
should be implemented and, as appropriate, segregating the assets of
any particular group (i.e. annuity contract owners or life insurance
contract owners) that votes in favor of such segregation, or offering
to the affected contract owners the option of making such a change;
(ii) establishing a new registered management investment
company or managed separate account.
If a material irreconcilable conflict arises because of SKANDIA's
decisions to disregard contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, SKANDIA may be
required, at the TRUST's election, to withdraw its separate account's investment
in TRUST and terminate this Agreement. No charge or penalty will be imposed
against a separate account as a result of such a withdrawal. SKANDIA agrees
that any remedial action taken by it in resolving any material conflicts of
interest will be carried out with a view only to the interest of contract
owners.
For purposes hereof, a majority of the disinterested members of the
Board shall determine whether or not any proposed action adequately remedies any
material irreconcilable conflict. In no event will TRUST be required to
establish a new funding medium for any variable contracts. SKANDIA shall not be
required by the terms hereof to establish a new funding medium for any variable
contracts if an offer to do so has been declined by vote of a majority of
affected contract owners. In the event that the Board determines that any
proposed action does not adequately remedy any material irreconcilable conflict,
then SKANDIA will withdraw the separate account's investment in TRUST and
terminate this Agreement.
TRUST will undertake to promptly make known to SKANDIA the Board's
determination of the existence of a material irreconcilable conflict and its
implications.
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8. SKANDIA shall provide pass-through voting privileges to all
variable contract owners so long as the Securities and Exchange Commission
continues to interpret the '40 Act to require such pass-through voting
privileges for variable contract owners. SKANDIA shall be responsible for
assuring that each of its separate accounts participating in TRUST calculates
voting privileges in a manner consistent with other life companies utilizing
TRUST. It is a condition of the Agreement that SKANDIA will vote shares, for
which it has not received voting instructions as well as shares attributable to
it, in the same proportion as it votes shares for which it has received
instructions.
9. The Agreement shall terminate automatically in the event of its
assignment, unless made with the written consent of each party.
10. This Agreement may be terminated at any time on sixty (60) days'
written notice to the other party hereto, without the payment of any penalty.
11. (a) This Agreement shall be construed and the provisions hereof
interpreted in accordance with the laws of the Commonwealth of Massachusetts.
(b) This Agreement shall be subject to the provisions of the '33
Act, the Securities Exchange Act of 1934, the '40 Act and the rules and
regulations thereunder, including any exemptive relief therefrom and the orders
of the Securities and Exchange Commission setting forth such relief.
12. It is understood by the parties that this Agreement is not to be
deemed an exclusive arrangement.
13. The names "The Galaxy VIP Fund" and "Trustees of The Galaxy VIP
Fund" refer respectively to the Trust created and the Trustees, as trustees but
not individually or personally, acting from time to time under an Agreement and
Declaration of Trust dated May 27, 1992 which is hereby referred to and a copy
of which is on file at the office of the State Secretary of the Commonwealth of
Massachusetts and the principal office of TRUST. The obligations of "The Galaxy
VIP Fund" entered into in the name or on behalf thereof by any of the Trustees,
representatives or agents are made not individually, but in such capacities, and
are not binding upon any of the Trustees, shareholders, or
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representatives of TRUST personally, but bind only the property of TRUST, and
all persons dealing with any class of shares of TRUST must look solely to the
property of TRUST belonging to such class for the enforcement of any claims
against TRUST.
Executed this ______ day of August, 1993.
THE GALAXY VIP FUND
Attest: /s/ W. Xxxxx XxXxxxxx, III By: /s/ Xxxx X. X'Xxxxx
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Secretary President
AMERICAN SKANDIA LIFE
ASSURANCE CORPORATION
Attest: By:
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